Why it Pays to Insure Your Gold Assets

Gold Assets

From tangible cash to properties, valuable assets must be insured against disasters and catastrophes.

As with any other valuable property, it is no surprise that people also insure their gold assets. Adhil Shetty of Yahoo! Finance writes that various insurance plans offer peace of mind when it comes to securing the metal, with plans covering theft and even accidental loss. Coverage increases in scope according to the plan that you pay for, with Shetty reminding gold owners that it is important to hold on to all relevant documents should the worst happen.

According to MSN Money there are two main types of gold insurance: standalone and content. The former is insurance taken out specifically for pieces of gold jewelry while the latter covers contents inside the home, which may include jewelry and other items. Standalone insurance matches the amount of the insurance that has been taken and provides that as coverage. This also means that there is a wider range of incidents covered within that policy. Content cover insurance on the other hand, has a sub-risk reserved for jewelry among the overall risks covered for your home’s contents. For example, if your total home content risk is worth $10,000 and the ceiling for jewelry, or other gold items, is 20% then your jewelry is covered for as much as $2,000.

One reason that investors may want to properly insure their gold assets is because the price of gold is strong this year. Some forecasters predict gold will hit a high of $1,475 in 2019 with a possible low of $1,200. So far these forecasts are accurate as the gold price chart on FXCM shows how its value is currently at $1,131. This is after hitting a low of $1,174 in August last year. Gold remains popular because it is still the most precious of metals as it holds no expiration date like copper, and does not depend too much on external factors the way stocks do.

One reason for this increase in value is that more investors are looking for a safe haven investment in case of an economic downturn. Gold’s properties, such as being portable, consistent in value, and almost universally accepted across the world, make it attractive in the face of global uncertainty. To quote Mining’s article, “factors such the level of US real interest rates, strength/weakness of the dollar, the likely impact of geopolitical factors and the pace of global economic growth continues to provide some uncertainty.” And one major factor in this price increase is the looming US-China trade war. As investors seek to sell off perceived “risky” assets such as US equities, safe haven assets, like gold, that can be moved around without a drop in value, become much more popular and valuable.

It is therefore only sensible for investors to insure their gold assets. Many Americans have taken heed of the current geopolitical situation and are now insuring themselves against the worst. It pays to be prepared.

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