Gold

Fact Check: Does Gold really yield no interests?

If someone wants to argue against gold and wants to take the easy way out, should use the following argument: “Gold does not yield interests”. For years, this sentence could be read again and again, because actually gold does not guarantee safe profits.

However, the argument  has become worthlessin times of zero interest rates – because call money or the good old savings account guarantee virtually no interest nowadays. And that’s not all: By rising inflation savings may depreciate over the long term when  the base rate stays comparably low. Financial experts are talking about “negative real interest rates.”

And what has gold as a supposedly bad because interest-free investment done in the meantime? Since the start of the bull market in 2001, the gold price has risen about six times at peak. Only in the first month of the year 2017 gold went up by about nine percent. And even the long-term comparison is positive for gold: Over the past 20 years, gold has gained an average of about 5 percent in value. While this is not a guaranteed return, such absolute securityhas long been gone even in equities and other asset classes as well.

About the author

Sebastian Wieschowski

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