Some people buy gold not in their physical possession, but stored for them by a bank, through a gold exchange-traded fund, or in the form of a gold certificate; their motivations also apply to those who hold gold physically.
Some asset allocation strategies use exposure to gold as a form of diversification, though the inclusion of gold in model portfolios created by major financial advisory companies is no longer common. Gold may be included in portfolios as an insurance against unforeseen calamities which may affect the price of other investments negatively.
From the perspective of a currency trader, one can view gold as simply another form of currency and that buying gold is a process analogous to currency speculation. For example, when it is expected that the dollar will soon decline against other currencies, for an investor who normally covers his expenses in dollars, buying gold or other currency before the decline and selling it afterwards could realize a profit. Additionally speculators attempt to make a profit by predicting the gold price, and detecting market trends they believe will show them the future price direction.
For centuries gold has been used as a store of value. When viewed from the historical perspective of a multicentury time frame, no other investment has the wealth preserving power of gold. Other assets are dependent upon a certain government or political climate to retain value, appreciate, and not be excessively taxed, but gold is largely independent of political climate (with the exception of laws specifically confiscating gold as Franklin Roosevelt did). Gold investors believe that political and economic turmoil may have a negative influence on the value of their other investments, but the opposite effect on the value of gold.
Gold's own characteristics, making regardless of how old age, its texture will not change, the value of long-lasting. It is precisely because of the expensive gold in the international financial system and the special status of gold as a good investment target, gold transactions in the world become a common means of investment. Specifically, the investment value of gold has in its fight against inflation, maintaining and increasing the value, no time limits of fair trade, and facilitate the physical delivery areas have unique advantages.
