Sunday, June 25, 2017

Americans cite gold as the 3rd best long-term investment but an estimated fewer than 10% actually own any

Gold and silver have been an intrinsic part of America's financial system for the greater part of her existence.  In fact, even the original founders mandated what the value of a dollar would be through the U.S. Coinage Act of 1792 where a unit of the nation's currency would be equivalent to 371.25 grains of silver.

But the 20th century has been one where both gold and silver have lost their perceived value as a store of wealth through the government facilitating its removal from the monetary system.  And as such, individuals over time have turned their investments away from the precious metals and into real estate and paper based assets such as stocks and bonds.

The financial crisis of 2008 brought back a glimmer of hope for a return to Americans finding solace in the precious metals where surveys from nine years ago showed that gold was deemed to be the best long-term investment, even above real estate and stocks.  But after gold prices fell over 40% in subsequent years following their highs in 2011, a large portion of the country now ranks gold as the third best long-term investment behind those other two assets.

Yet there is at least one significant-seeming economic question with no reliable answer: How many Americans own gold? 
Certainly a notable portion of the country believes that gold makes a good investment. Gallup annually surveys American adults on their perceptions about investments; in 2011, when gold prices were relatively high, gold was deemed the best long-term investment by 34% of respondents (real estate was next at 19%). As gold prices subsided, the percentage naming gold as the best long-term investment fell. Nonetheless, in 2017’s survey, gold still ranks as the third best-perceived long-term investment, behind real estate and stocks/mutual funds. – Los Angeles Times

However liking gold, and owning gold in America appears to be two different animals.  And while it is extremely difficult to get exact numbers as to how many Americans own actual gold or silver bullion outside of jewelry and heirlooms, industry experts suggest that less than 10% of Americans actually own any precious metals in bullion form.
The World Gold Council, which gathers and disseminates mountains of statistics about gold, says it can provide no estimate for the number of Americans who own gold as an investment. Metals Focus, a London-based precious-metals consultant, says it has no figures that it can release. When I passed along an estimate that fewer than 10% of American adults own gold as an investment, a spokesman wouldn’t confirm, but hinted that it was accurate.
Because stocks and real estate prices have not only recovered from their declines following the 2008 financial collapse, but are also at or near all-time highs in certain regions and sectors, most investors have shifted away from gold, or at the very least own it in paper form on exchanges.  But as the world appears more and more to be sliding into recession, and also towards a new financial crisis, it will not take long for Americans to once again look to gold and silver as true wealth protection outside the system, only this time there will likely not be ample supply for them like there was in 2008 when gold suddenly became relevant again to the masses.


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