Gold is a very precious metal. Gold is used in jewelry and ornaments. Gold displays luxury. When it comes to global consumption, China ranks first, followed by India.
India is using gold jewelry since 3900 BC. Indian households have approximately 16,000 tonnes of gold in the form of jewelry and ornaments. This is worth more than Rs 28 Lakh Crores, which is more than double of RBI’s foreign exchanges reserves.
With fluctuations in rupee vs dollar and monetary policy, it is only wise to invest in gold in 2019. Geopolitical and economical turmoil are set to worsen and affect global markets, considering this, investing in gold would serve as insurance in bad times.
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1) Gold Maintains Its Value Over Time: Gold is an important hedge against inflation. Investing in gold does not offer high returns unlike real estate and equity, but your investment would at least be safe. Investing in gold is a boon when the stock markets are falling. Therefore, it is safe to say that gold maintains its value over time.
2) Risk exposure: Investing in gold has minimal risk. Traditionally, gold has proven to be a hedge against inflation. Moreover, inflation or deflation does not have much of an impact on gold price.
There is only one risk behind investing in gold and that is you may earn lower returns by investing in gold as compared to other investment options offering higher returns. The risk of investing in gold is lower vis-à-vis these risky avenues.
3) Liquid in nature: Physical gold is highly liquid. Physical gold can easily be exchanged for cash. This can be done in a matter of minutes. There are a lot of banks and financial institutions offering instant gold loans. There are traditional gold pawn shops where you pledge gold for cash.
4) Extremely Convenient: It is extremely convenient to buy and sell gold in the market, thanks to its liquidity. Existence of gold equity traded funds, gold ETFs, has made it convenient to purchase and hold on to the investment in gold for short term gains. Muthoot, Manappuram and other gold finance companies have made the process of availing gold loan hassle free and easy.
Gold plays a significant role in deciding India’s economical growth. A country’s currency is directly tied to the gold reserves of the country. This is also called bullion reserves. A country can print its currency on the basis of it’s:
1) Bullion reserves
2) Foreign exchange reserves
3) Bill of payments
Prior to this, barter system was in place under which goods were traded. Individuals found the barter system not too great and this was when currency system was introduced. Currency defines the worth of goods that is printed on the note or coin. Currency is a way of measuring the worth of goods and services both in terms of quantity and quality.
Following are the advantages of investing in gold:
Following are the ways in which you can buy and invest in gold:
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