Throughout history, famous investors, economists and thinkers have extolled the virtues of gold as a store of value and hedge against inflation. Their timeless quotes on gold investing illustrate why the yellow metal remains an essential part of any diversified portfolio. With over 5,000 years of history as money, gold offers stability amidst economic turbulence. Its physical properties make gold a reliable way to preserve wealth over the long run. As these gold investment quotes show, gold provides protection when paper currencies lose purchasing power. Savvy investors allocate a small portion of their assets to gold as insurance for the future.
Gold has intrinsic value independent of any monetary role
Unlike paper money, gold has inherent value derived from its unique physical properties. All fiat currencies depend on faith in governments, but gold stands on its own as a scarce, durable, divisible, portable and fungible asset. This reliable base of intrinsic worth underpins gold’s ability to retain value over centuries. Famed investor Warren Buffett summed it up: “Gold gets dug out of the ground in Africa, or someplace. Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.” Yet we continue mining gold after 5,000 years because it retains value no matter what governments do.
Gold provides stability amid economic turbulence
Physical gold offers a dependable store of value when paper assets decline. As investor Ray Dalio explained: “Cash is trash during periods of inflation because it becomes worth less while gold maintains its value”. Since gold cannot be printed or debased, it tends to rise when investors lose faith in fiat currencies. Billionaire Sam Zell echoed this view: “gold retains value in the face of instability in currencies or confidence or governments. There is no confidence fairy for gold!”. Gold climbed from $270 to $1,900 per ounce between 2001-2011 as the US dollar lost purchasing power. This performance reveals why gold deserves a small role in portfolios.
Gold rises when fear strikes markets
Gold often rallies when investors get scared, underpinning its reputation as crisis insurance. Billionaire Thomas Kaplan noted that “Gold is a play based on human emotion and human psychology”. The yellow metal surged after the 2008 financial crisis brought the global economy to its knees. More recently, Russia’s invasion of Ukraine sent gold jumping as investors sought safe havens. Such episodes validate Marc Faber’s perspective: “When people lose confidence in governments and paper money, they always buy gold and silver.” With recession risks looming, volatility shaking markets, and geopolitical dangers ever-present, prudent investors should hold some gold.
Central banks remain big buyers of gold
Despite downplaying gold for decades, central banks have become aggressive buyers. From being net sellers throughout much of the 1990s and 2000s, central banks switched to net purchasing from 2008 onwards. Their gold reserves have grown from 30,584 metric tons in 2007 to 36,561 metric tons by Q3 2022. Poland, Hungary, Thailand and many emerging countries are leading a drive to remonetize gold. In the words of Russian President Putin: “In the modern world gold remains the ultimate financial asset and safe haven investment”. Central banks aim to diversify away from USD and reduce reliance on fiat currencies. Their actions speak volumes about gold’s enduring status as real money.
The timeless quotes on investing in gold validate why it merits inclusion in balanced portfolios. Gold provides a hedge as paper currencies devalue and economic fortunes fluctuate. Its physical properties give gold inherent value beyond government dictates. When the next crisis strikes, gold will retain its allure as a bastion of stability.