Someone who has never bought or sold gold before might assume that this material has a stable value that doesn’t really change. While this is true in a sense, there’s no denying that the economy can also have a direct influence on current gold prices. As the team at Hawaiian Island Stamp & Coin in  Honolulu, HI, explains, understanding gold’s relationship to the economy is crucial for making smart investment decisions.

It is true that in a world with constantly changing stock prices and inflation rates, the value of gold is relatively stable. This is because gold has long held its own inherent value that has made it prized by cultures around the world. This inherent value means that gold isn’t going to suddenly become worthless—a problem that has caused many paper currencies to go extinct over the years.

Because of gold’s reputation, however, its value can be directly impacted by economic instability. In times of economic crisis or high inflation rates, investors often shift their investments to gold in order to stave off potential losses. As a result, the value of gold goes up.

On the other hand, gold prices will fall during those times when the economy is considered to be strong. In these situations, gold’s stability also means that it won’t generate as large of returns as stocks or bonds, making it a less desirable investment option. Prices will subsequently drop. 

Over the long-term, gold’s value will increase, despite external market fluctuations. If you’re looking at gold as a long-term investment, temporary economic shifts shouldn’t be a cause for alarm.

Whether you wish to buy gold or collectible stamps, you can find what you’re looking for at Hawaiian Island Stamp & Coin. With over 40 years in business, you can trust their expert appraisers to provide a fair price when you’re buying or selling gold and other valuables. To learn more about their collection and services, visit them online or call (808) 531-6251.