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Major Benefits of Investing in Gold

4 min read
benefits of investing in Gold

For ages, gold has been considered a precious yellow metal and admired all across the world due to its shine and magnificence. The first appearance of gold coins were made around 640 B.C, and the first genuine gold coins came in the market during the kingdom of King Croesus of Lydia nearly 100 years later. If we talk about India, gold is considered not just a precious metal, but people also carry high level of emotions attached to the same. Be it a wedding, anniversary, birth, death, or any other occasion, gold metal is known to have some kind of attachment to almost everyone’s life. Among all other things, a gift of gold is considered not only auspicious but also worthwhile. So lets talk about major benefits of investing in gold, we have listed all beneficial points below.

Not from a monetary perspective, gold certainly carries an edge over others. In times of financial emergency, people have an option to sell their gold to get quick money. They can even put it on lease to procure the funds and repay the amount to get back the jewelry. But this is from a layman’s point of view. From an investment perspective, gold is considered a great asset due to many reasons. With the continuous increase in gold prices, it can be said that if you invest in gold, it is more likely to get a surge in its worth in future. This is what makes gold the most sought-after metal among investors.

Various gold rate prediction reports expect a great increase in the price of the metal. So, if you are looking to buy gold, you must need to know all the major benefits of investing in gold. Here they are:

Protection against inflation

This is certainly one of the biggest benefits of gold investment. In the case of rising inflation, the worth of a currency takes a dive. Over a period of time, nearly all leading currencies have faced a decrease in their worth in comparison to gold. Thus, people have been found to hold money in the form of gold. In scenarios when inflation remains high, particularly when it is in high double digits, prolonged in the economy, gold provides a verge against inflationary scenarios.

Easy liquidity

In times of a financial emergency, investments in gold can be honored much quicker than other tangible assets even better than real estate. Contrary to several other types of assets, there is no lock-in time period in gold investments excluding sovereign gold bonds. The redemption value in case of physical gold will, though, depend on the cleanliness of the gold, quantity and other aspects including the market price.

If you have paper gold, the market value on the redemption date regulates the redemption value. People can opt for gold against loans in case of financially weaker scenarios.

Enables portfolio diversification

According to the top 10 stock brokers in India, gold is largely considered an extremely effective portfolio diversifier due to its low to zero association with all other leading asset categories. Despite this, exhibits no statistically noteworthy association with mainstream asset categories.

However, some also recommend that there is enough testament that when equities are under pressure. In other terms, when share values decrease quickly, an opposite association can emerge between gold and equities. Gold is known to safeguard one’s portfolio from uncertainty because both the macro-economic and micro-economic factors influence the returns of most asset classes do not meaningfully influence the value of gold. For a certain stage of returns from a portfolio, the risk or volatility can be brought down by including gold in it.

Tangible asset

No matter whether you invest in FDs or stocks, tangibility is always an issue. However, that is not the case with gold which is a tangible asset. The high level of tangibility gives a kind of assurance to investors. Moreover, buying gold is a lot easier in comparison to buying other tangible assets such as real estate. Moreover, due to this feature, while assets stowed digitally are susceptible to hacking and other misapplication, gold stays away from such concerns. However, it does come with its own threats. So, be wary of them.

Conclusion

Though gold is considered a safest and valuable investment asset for investors, it is necessary for them to be aware of both pluses and minuses of investing in gold. So, do proper market research before investing in the yellow metal. Also, keep a check on the latest gold rate prediction for better decision-making.

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