Is Cash For Gold A Scam? The Price Of Gold And Whether You Should Sell

Is Cash For Gold A Scam? The Price Of Gold And Whether You Should Sell

You’ve seen the tacky Cash4Gold ads. Even though they look kind of sketchy, it’s not hard to wonder how much money you could make if you did sell your gold. After all, the price of gold has recently seen all-time highs. Is it really such a bad idea?

1. Hang On To Your Jewelry

It probably has more sentimental value to you, anyway. Cash4Gold has been reviled as a scam by loads of consumers who receive way less than market prices for their gold items.

2. There Are Ways To Buy Gold, Without Literally Buying Gold

There’s the gold in the necklace that your grandmother got you for college graduation, and then there’s the gold that investors use for speculation. To “invest in gold,” investors don’t need to run out to a jewelry shop. Instead, they can put their money in a gold-based ETF, which is an investment that helps them invest in the gold markets in general. The money from that investment will be in the investor’s brokerage account and portfolio—but she never literally goes out and chooses pieces of gold.

3. What Determines The Price Of Gold?

The same way that the value of a currency—or any other product—increases when lots of people buy it, the value of gold goes way up when lots of people have been investing in it.

4. Traditionally, Buying Gold Is A Way To Protect Yourself From Inflation

What does this mean? Well, during inflation, each dollar becomes worth less (example: a loaf of bread that used to cost $2 might now cost $3). Since our dollar isn’t on a gold or silver standard, it can slide around in value. But, gold is a limited resource, so it won’t suffer from the same sort of inflation as currency. Some investors who are worried about inflation put their money in gold in order to protect themselves.

5. There’s No Big Inflation Right Now—But Gold Is Still Popular

Since people don’t seem to be using gold as a hedge against inflation right now, the surge in gold is probably a sign that people are nervous about the political and economic atmosphere in general. All the same, remember that you should be investing for the long term. Don’t sell all your investments or liquidate everything into gold just because other people are jumpy. Hold steady—historically, the market has always gone back up eventually.

Check out our article for more advice on what to do when the markets go crazy.

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