Why would someone sell gold in exchange for paper money if gold is so great?

Answer 1

There are a few reasons why someone would sell gold in exchange for cash. The first is rather simple.

Sometimes gold owners sell because they are in need of cash to make a purchase such as a new car, a stereo, possibly dinner at a favorite restaurant. (Businesses will generally not accept gold as payment) Or they may need money to pay an outstanding bill.

Another explanation could be investment related. If a gold owner believes, for example, the price of this precious metal is going to fall, they may want to sell today to avoid a future loss. Other sellers maybe concerned about diversification.

Lets say you invested $100,000 in gold and $10,000 in stocks. This is a clear case of owning too much of one investment. A more prudent person would invest some of this money in gold, a little in stocks, and the rest in real estate. Thats a much more diversified and thus safer portfolio.

I am not sure if this is helpful but hopefully you now have a better idea. Good luck!!

Christopher

Answer 2

gold, like an IRA or stocks, is an investment, purchased in the hope of increased value. neither walmart nor the electric company accept these investments as legal tender. in other words, you can't use gold to buy your groceries, at least not in this day and age.

i have a gold ring that my mom left for me when she died. as monetarily valuable as it is, sentimentally it is too precious to me to part with for any amount. i WOULD probably sing a different tune if i was sleeping in a cardboard box under a bridge, my only belongings being able to fit into a shopping cart stolen from a store parking lot. knowing my mother, if i ever become that destitute, she'd want me to cash it in so i could eat.