Does investing in gold sound old school? Definitely not, especially for us Indians – it’s less an investment and more a tradition. Precious metals and stones haven’t lost their touch in the modern world yet, and don’t seem like anytime in the near future. If there’s one metal that we can’t surpass to date, it’s gold. This yellow metal has held its place ever since centuries and still doesn’t let us lose hope anytime soon. If you had been gifted a gold anklet ten years ago but didn’t know what you had been holding on to – look up the prices now, and you’ll be spellbound by this metal.
Still thinking about why to invest in gold in the ever-evolving digital era. Let me tell you why – why to invest in gold in 2023.
Why Invest in Gold?
Before you go away looking at the live gold price in Ahmedabad, Bangalore, Chennai, and other cities – there are quite a lot of reasons why you need to start investing in gold, and they are:
- Gold’s value has remained stable over time, and people regard it as a means of passing on and preserving wealth from one generation to the next.
- Gold has historically been an excellent inflation hedge, as prices rise as the cost of living rises.
- When the reserve currency loses value, the price remains stable: When the US dollar or the reserve currency falls, gold prices rise. Because of this, gold is known as a safe haven. When the value of the reserve currency falls, people begin to flock to gold’s security.
- Gold’s purchasing power soars during deflation – During deflation, prices fall, business activity slows, and the economy becomes overburdened with debt. Gold’s relative purchasing power rises while other prices fall.
- Increased demand – The increased wealth of emerging economies increased the demand for gold. It is quite ingrained in the culture of the majority of countries. Indians purchase a lot of gold, particularly during the wedding season, and China purchases gold bars as a traditional form of saving. Gold demand has increased among investors as well.
- Used to diversify a portfolio – The key to diversification is to invest in products that are not highly correlated with one another. Gold has an inverse relationship with stocks and other financial instruments. As a result – it is an excellent choice for diversifying your portfolio and ensuring that overall volatility and risk are reduced.
- There is a supply constraint – Since 1990, the majority of gold supply has come from the sale of gold bullion from central bank vaults. However, the central bank’s supply has decreased, and gold mining output has decreased as well. A new mine will not be operational for another 5-10 years. Gold prices rise when the supply of gold is reduced.
- Crisis commodity in times of geopolitical uncertainty – When global tensions rise, people seek relative safety. When people have little faith in their governments, gold prices tend to rise. The European Union crisis fueled this year’s significant gold price movements.
- Easy Buy and Sell – Physical gold can be purchased from any jewelry store in your area. However, it is best to purchase them from reputable jewelers who can provide a guarantee certificate for the product. It is worth noting that even banks sell them, and you can easily obtain gold coins from them. The main advantage of purchasing from reputable sources is that you will receive original quality without risk, as well as proper receipts for future reference. You can check the current gold price and buy it from reputable sources. When it comes to selling, you should go with local jewelers because they will be the most convenient source. Remember that gold is always in demand, so you don’t have to worry about liquidating your gold assets. When you sell them in the market to local jewelers or traders, you will receive immediate cash. If you do not want to sell them, you can pledge them and borrow money from a variety of financial institutions. Most people choose such options when they have gold in the form of ornaments, and they usually buy it back later when they have enough cash.
- Time Makes it Better – Unlike other investments, such as real estate, this will not depreciate in the future. It will not lose its value due to age, and even old gold ornaments will command the same market price as new gold ornaments. You can even check gold rates in Delhi and other popular cities to confirm this and exchange your old ornaments for new ones in the future.
- It is Security – When you buy physical gold, you won’t have to worry about your investment fluctuating too much in the market. When you compare the current gold price to previous rates, you will notice that it is more or less stable when compared to other market assets. Even after many years, your gold will have a high market value, providing complete security for your future.
- Loans – You can never be certain about emergency situations in life, so you should always be financially prepared to deal with them bravely. In this regard, you can rely on your gold investment because it is easily liquidated in the market. If you have ornaments, you do not need to sell them because banks and other financial institutions will lend you money against them in an emergency. In most cases, you can get a loan based on the overall value of the gold within a single day. After you repay the loan, the banks will return the same ornaments in pristine condition. This is a secured loan, and the interest rate will be much lower than the general rate.
- It’s easy maintenance – The best part about investing in gold is that it requires no maintenance on your part and can easily be stored in a safe place for hundreds of years. Consider this: if you have invested money in a property, you must keep it in good condition, which can be exhausting if you are busy with your profession. On the other hand, you can buy gold and keep it in your locker for many years without having to do anything.
Gold, just like wine, ages fine. The longer you hold on to it, the more it gives back to you. These reasons for why you need to invest in gold have mostly gotten you going to buy gold and start saving up.