'Money without borders': Why gold is so attractive during unstable times
Published Thursday, January 28, 2016 9:16AM EST
With an unstable economy and a tumbling dollar that earlier this month hit its lowest level in 12 years, more Canadians may be considering gold as a more stable investment.
Josh Crumb, founder of Canadian company BitGold, says investments in gold tend to increase during unstable economic times.
"What gold is really about is long-term stability," Crumb told CTV's Canada AM on Thursday. "It's been money for 5,000 years. It's money without borders."
As of Thursday, one ounce of gold cost CAD$1,576 and earlier in the week the commodity hit a 12-week high.
Why doesn't gold fluctuate the same way currencies do?
Crumb said the rarity of gold is what keeps the commodity so stable.
"Gold is just this precious element that takes a lot of money, a lot of time and a lot of energy to produce from the ground," Crumb said. "There's always a cost to it."
How do you buy gold?
Individuals can invest in a gold exchange-traded fund (ETF) -- which is backed by gold. The ETF is redeemed for its cash equivalent. Gold coins could also be purchased from various dealers
Alternatively, BitGold allows individuals to save small amounts of money towards gold through an online account.
"Just like you're putting money in a bank account," Crumb said.
BitGold users can make and receive gold payments through their account. They also have access to a prepaid card to spend their gold at traditional points of sale or they can convert the gold balance to a local currency using an ATM.
When is the best time to trade your gold in?
Crumb said many individuals use their gold when the economy is going through a downturn and the dollar is low.
"This is when you want to be able to spend your savings that have held value," he said.
Crumb said some BitGold employees receive part of their salary in gold.
"A lot of them went south for the holidays and they were very happy they had gold, and not just the Canadian dollar, to spend when they were abroad," he said.