This article discusses buying gold as an investment.

History

Hoard of medieval gold coins.Gold was in use as a form of money, in one form or another, at least from 560 BC until the end of the Bretton Woods system in 1971. It was used as a store of value both by individuals and countries for much of that period.

Since the end of the Bretton Woods system in 1971, gold has largely lost its role as a form of currency. It is still considered by many as a store of value and a safe haven in times of crisis.

Central banks are believed to retain large gold reserves.
 

Types of gold investor
Investors may buy gold as an investment because they are either one of, or a combination of, the following:

Asset allocator
Gold, a popular investment and part of many asset allocation models in the 1970s, [8] has largely been abandoned since the 1980s. However, some asset allocators and investment advisors are again advocating it. [9] [10] [11] [12]
Cacheurs (people hiding wealth)
Physical gold can be anonymous. Gold is a very soft metal, meaning that (assuming the gold is in the physical possession of the owner) the bar's serial number can be altered or obliterated with a hammer and chisel. If the bullion's ownership is not recorded anywhere the gold can become untraceable. Cacheurs seek to hide part of their wealth from their spouse, family, tax authorities, creditors, thieves, invaders or others. The density of gold allows them to store a large value in a very small space, without fear of depreciation or erosion over a long period of time.
Central banks
Although central banks as a whole have been net sellers of gold over the last few years, some have been buyers. A central bank may invest in gold in order to ensure that part of its reserves are held in a liquid and tangible form which could be used quickly in times of crisis. Most central banks keep the majority of their reserves in USD, but like any other investor diversification makes sense. The dollar is a liability of the United States of America. Its value thus depends on the USA honoring it in exchange for goods or services. Central banks may fear that in a time of crisis, or if there were a USD crisis, dollars may not prove to be useful. This might happen if sanctions or exchange controls exist. The banking system may make it hard to move USD if restrictions were imposed.
Currency speculator
Since the main gold market is priced in US dollars, speculators who believe the dollar will decline may buy gold. They think that if the dollar declines, the gold price will remain constant in other currencies, thus rising in terms of the U.S. dollar. Gold may also be bought if they feel that a different currency will decline, since they expect the dollar price to be stable, but the foreign currency price to rise.
Financial institutions
Banks and funds may invest in gold to protect themselves against potential loss on gold linked products that they have issued. These may include gold certificates, options, forward contracts, gold linked notes and other products containing a derivative feature linked to the gold price.
Gold bug
Gold bugs, in the traditional sense, believe in, fear, or even hope for another Great Depression or Armageddon, and believe that by holding gold they will survive and prosper.

Krugerrands are a popular way to invest in gold because they have low premiums over spot.Hoarder
Some investors consider gold as a long-term store of value and invest in it to maintain their purchasing power. By buying gold and hanging on for the long term, they believe they can keep their wealth intact.
Libertarian
Libertarians may use privately issued digital gold currency, in preference to fiat currency, for reasons such as lack of trust in fractional-reserve banking or monetary policy.
Petroleum speculator
Some have speculated that there is a correlation between the price of oil and the price of gold. The general rule is that the price of an ounce of gold is 10 times the price of a barrel of oil. [citation needed]. This is in part because mining gold is an energy intensive process, the cost to mine an ounce of gold will increase as the price of oil increases and in part because they are both commodities and often affected by the same economic stimuli. Source: [13] Buying gold is one way for a speculator to bet on the price of oil going up.
Portfolio hedger
Similar to asset allocators, except the purpose of the investment is to hedge against rapid inflation or unforeseen calamities which may affect other investments negatively. These individuals believe that certain events, if they occur (e.g. war or economic crisis), may have a negative influence on the value of their other investments, but the opposite effect on the value of their gold.
Speculator
Speculators attempt to make a profit by predicting the gold price. They may think that macroeconomics are affecting the demand for gold, or believe they have detected a market trend showing them the future price direction.
Espionage
The sur