Investors are careful while investing in physical assets like gold, especially because it doesn’t earn interest. The exchange of cash for gold has been an age-old tradition in India. The yellow metal is highly valued, has a rich history, and attracts people to invest in physical and digital forms.
Indians keep a close eye on the gold jewellery rate and get cash for gold to meet their financial goals.
Here is the graph showing the increasing demand and value of gold over the years:
Here are the top ten reasons why everyone should invest in gold.
Unlike earlier times, gold is not a currency anymore. Gold’s role as money is much more superior than any currency now. It has been used for its monetary value for the last 3,000 years, the oldest currency in history. The British Pound Sterling has been in use for only 1,200 years. Therefore, gold serves its purpose as a long-term store of value.
An investment in gold can never go bankrupt. A gold owner does not require any paper contract to make it complete. There is no intermediary or third-party involvement in the physical gold investment. This is because gold is a financial asset and is not a liability to another person simultaneously. The value of gold has never gone down to zero, and it is a powerful tool in times of economic crisis.
Gold acts as a hedge against inflation in the long run. The value of currency depreciates when inflation increases. However, the gold jewellery rate has increased multiple times over the last decade. When the inflation rate exceeds the interest rate, other saving instruments may not be profitable, but gold fares well even under such situations
Gold is perceived as a safe investment instrument as it is a tangible commodity. While tangible assets like real estate require huge investments, one can purchase small quantities of gold. Additionally, physical gold is free from the dangers of hacking and misuse, making it further safe.
You can carry gold around your pocket and easily sell it. An investor can sell physical gold at any jewellery shop, pawn shop or gold dealer. Unlike shares, an individual can sell gold and get cash instantly in their bank account.
Unlike other instruments like shares, cryptocurrencies, and mutual funds, an investor does not require any knowledge to buy or sell gold. There is no need to study trading charts or market reports to buy gold. An investor can walk into the store of a reliable seller and purchase gold. He can even buy gold online from a trusted brand. Therefore, buying gold is a straightforward process.
Gold can protect your investment in uncertain times. Gold can be a defensive tool or a profit machine, depending on the investor’s financial need and prevailing economic conditions.
Gold can help diversify your investment portfolio because it has a negative correlation with other asset classes like equity. When the price of shares falls, an inverse relation establishes between gold and equity.
As has been the tradition in our country for years, an investor can easily pass on his gold possessions to future generations. It is traditionally given to newlyweds as a gift and does not lose value even after decades.
An investor can use gold to access a loan easily. Gold ornaments, coins or biscuits can be easily pledged to get a loan against them. The advantages of gold can make it an ideal investment option for investors of all ages.