Is it a smart move to invest in gold?

At the time of investment, it is natural for an investor to be curious. He would try to unearth that whether or not a particular asset is going to ensure safety as well as maximize his returns. So is the case with gold. 

Frankly, investing in gold has always been in trend. And when something people have been trusting over the ages, there must be something right with it. Let’s try to spell out why exactly people are driven to buy gold leaps and bounds and what makes it such a safe and sound investment: 

1. Offers hedge against inflation 

Historically, gold has been a convenient tool to protect investors from uncertain economic conditions. Typically, whenever such an increase takes place, the price of gold tends to rise along with everything else. Therefore smart investors make it a point to store gold when there are any signs of their local currency not doing well.  

2. Rise in demand 

Off late, the need for gold has increased out of proportion. As the basic rule goes, when the graph of the market goes upward, prices also witness hike. China and India are known as the leading importers of gold. 

Especially the worth of gold in the subcontinent is quite unlike anywhere else in the world because jewelry is embedded tightly in its culture. Also, the demand for gold is all set to increase soon due to the growing middle class all around the world. 

Apart from the people, governments of different countries are also investing heavily on the yellow metal. The USA has been particularly keen to store gold. 

3. Faster liquidity 

At times it could be tough to liquidate your assets in an emergency. As is the case with the real estate sector. You are never too sure about the period of your property’s liquidity. Luckily, gold does not pose any such obstacle. 

The liquidity process is not time-consuming at all. Contrary to many assets, gold does not require any lock-in period. Even buying gold is no bothersome practice, it has become even more comfortable since the addition of sizeable online bullion dealers today, such as, where you can invest in precious metals right away!

4. Gold does not need pampering 

Well, there are so many asset commodities that require a lot of pampering. On the other hand, once you buy gold, there are no upkeep and maintenance costs to keep it in good shape. 

Moreover, gold is tangible and, therefore, far away from the reach of hackers. While brokerage accounts and bank accounts may have the possibility of getting hacked, gold is safe as a house. 

Besides, gold will not take any notice of natural calamity since its immune to things like water, etc. 

5. Geopolitical instability 

Gold is known as a crisis commodity. Not only because it rescues the investors during uncertain and weak financial scenarios but also during the social and political crisis. These crises could become internal, regional, or global. 

For example, when a crisis leads to low-confidence on the local government, then the gold price is likely to increase because people will pull off their money from government-controlled assets like the stock market. 

Oil crisis, cold war tensions, and the USSR’s invasion of Afghanistan, so many significant developments took place in the late 1970s. So how did gold prices react to all these events? Well, from 1976 to 1980, the gold prices increased by 721%. So many more examples are recorded in our history which influenced gold prices quite drastically also read homeshop18 lucky draw.

6. Scarcity of supply

Another biggest reason which has added in gold’s value is its scarcity. Since the year 2000, gold mines are not being as readily discovered compared to the past because mining costs have skyrocketed. Mind you; it takes 5 to 10 years to a mine before it starts producing gold. 

As a rule of thumb, when supply is not catching up the demand, then the commodity becomes more valuable. Also, the rise in mining costs has a huge say in the gold prices.

7. Global debt is getting beyond control 

Global debt is increasing at an alarming rate. More so after the year 2008. It is another indicator that will force investors to buy more gold as it is a haven for them. Consequently, gold prices will increase. 

8. You don’t have to be an expert at it

Well, sometimes, your knowledge becomes an obstacle to invest in a particular asset. For example, you can’t invest in stocks and expect good returns unless you know the stock market operates. 

But buying gold does not require you to possess specialized skills, which is a big motivation for the common man to see it as an attractive investment option. If you need better returns with limited knowledge, you should pick gold as your go-to choice. 

The last verdict 

After going through this piece, one must be free of all the doubts regarding the safety and perks that come with investment in gold. If not more, you can be sure of at least not losing your hard-earned money.

Leave a Reply

Your email address will not be published. Required fields are marked *