Why buy gold?

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  • Gold is often called the “Crisis Commodity”, because it outperforms other investments when world tensions rise in geopolitical uncertainty.
  • In financial uncertainty such as when reserve currency such as US dollar weaken, people flock to gold.
  • Gold hedge against inflation. Gold tends to rise when inflation increases.
  • At the present moment, the supply of gold is constrained as the current price of gold is US$1274, which is not much higher than the cost of production of gold, which is about US$1000.
  • GLD ETF is listed in both US and SGX exchanges. Both are traded in USD.
  • GLD do not pay dividends.
  • I bought some GLD at US$120.5 as an investment. Will add if it drops further. Together with TLT, these are part of my hedge against the dividend stocks that I am holding.

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