Does Gold Have Any Intrinsic Value and should you invest in it with your SMSF?

Have a self managed superfund and If you are looking for advice about investing your retirement money in gold, you will find that there are a lot of pundits and experts who have so much to say. Warren Buffett, one of the world’s most respected businessman who is also known  as the “Oracle of Omaha” for his knack of finding stocks that pay great dividends to invest in does not believe in gold. When dealing with the issue of defining the intrinsic value of gold, he said that gold is taken out of a hole in the ground, extracted from the mined ore, melted and then buried again in some vault with people paid to guard it. He said that “even Martians would have a hard time understanding the obsession with an asset that has no utility.”

He also said that if we took the entire gold stock in the world and melded it together, it would fit a 68-foot cube valued at $9.6 trillion. “For that amount, an investor could have bought all the farmland in America, 16 Exxon Mobils and still have a trillion dollars to walk around with. In a hundred years, the farmland would be producing crops to feed nations and the dividends from the Exxon Mobil replicas would have added trillions. Gold, on the other hand would remain unchanged. You could fondle the gold, but it still won’t respond”

That is a bleak way of looking at gold when you want to buy SMSF gold bullion Brisbane. Maybe we should not be trying to lump gold with all other kinds of investments. Buffet’s analogies may ring true. “Intrinsic value” might be a fuzzy concept when it comes this precious yellow metal. Gold definitely has an “intrinsic cost. “Let’s say it takes about $2000 to dig up an ounce of gold, so it has that value to someone. If it’s not being over-produced then it could have intrinsic value. People will pay that $2400 an ounce for different applications like industrial, technology, medical and jewellery related applications amongst others.

Gold is a store of value. It is easily identifiable and the market can’t be easily flooded. You can sell it for $2400 to anyone who wants to hoard it and it will retain the same value. If will continue to have value to hoarders, Industrial manufacturers and wearers of jewellery. It has value to everyone else like bullion dealers who sell it to people who regard it as important. One could argue that it shouldn’t be considered as having intrinsic value because it relies on increased demand pushing up the price. Of course demand can go down, but so far gold has persisted to have value for centuries. With the growing number of applications for gold, it is likely to be in demand for another century. When you consider the many uses and qualities that gold has, it has more intrinsic value than any fiat currency. Buy SMSF gold bullion Brisbane if you want to invest in something that has held its value for millennia and will continue to be valuable for millennia to come. Many experts have recommended that all self managed super funds invest a proportion of savings into gold bullion. This can serve as a hedge against inflation or market turmoil. Especially those closer to retirement age near the top of an economic boom cycle.

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