Gold has always taken a special position in the heart of people. Some people have an emotional connection with it, some consider it auspicious, and many mark it as a safe investment.
In countries like India, this transition metal has a high demand. This metal has entered almost every household in India. From Royals to temples, gold has been eternally used as a decorative item and exemplifies richness.
These precious metals are known for their longevity and keep passing on from one generation to another as a legacy.
Gold is often considered a status symbol, too, on some occasions.
But is it a wise decision to invest in gold?
Before jumping into the pros and cons, let’s have a look at various standards of gold
There are three standards of gold.
1.Gold species: This standard is directly related to the price of the different gold coins in use.
2.Gold exchange: This standard is related to the circulation of gold coins with a lower price, for example with silver.
3.Gold bullion: This standard is based on the fixed price directly proportional to demand.
This shiny, durable metal ascertains its stability attractiveness over time. Investors contemplate gold as one of the protected investment options, recovering its value fast through economic fluctuations. Its cost often shows resistance to the stock market or economic oscillations.
Now, let’s analyze what could be the possible windfalls of investing in gold.
1.Hedge against elevated inflation: We all know-how inflation is eating our money; it affects the dollar’s value. The purchasing power of the dollar keeps on decreasing over some time. But if you have invested a substantial amount of money in gold,
It would maintain its purchasing power over a period even if the value of the dollar declined.
2.Its price keeps increasing: One of the key reasons investors are interested in putting in gold to their portfolio is the safety of recognizing that the value of gold will steadily rise over time.
If you analyze the past few years, the gold price had a greater value today than it was a few years back.
3.No need to analyze the industry-based performance: You need not have to keep a track record of how a particular company or industry is performing, which are normal norms to be followed when it comes to stocks or bonds and mutual funds.
If you invest in the gold mining industry, which is like investing in stock, you have to do proper research.
A situation like the pandemic of corona had a lesser impact on the value of gold.
4.Demand for gold is increasing: Each year, the demand for gold is strengthening, especially in India, which ranks in the second position in the world. Hence with an increase in demand, the price also increases.
5.Tangible asset: Gold acts as an incredible long-term investment. It will assure you of safety and helps in wealth creation. You can use this asset in any emergency.
Although investing in gold is having many positive aspects, it still has some cons, like if you sell the gold in a short period, you will likely get less money.
Unlike stocks, as the risk is too low, the return is also low. But if you keep holding your patience and sell it in a longer-term, then you can grab a good return. Keeping physical gold at home is risky, so if you want to invest in gold for investment purposes and not in jewelry, you can invest in Gold ETF to purchase a proportionate gold value but not in physical form. You need a Demat account.
So, invest wisely and do some analysis before jumping into any pool of investment.