Gold investment

For thousands of years gold has been considered as the international currency which is an object of beauty. Due to the rise in financial market in 1980’s, this metal lost its popularity and started to move backward. But recently it has bounced back and it has started to regain its popularity. Now the question is how it has made the come back. Gold attracted investors throughout the decades. In recent times it has been found that people are more concerned about the protection of their money or capital. The reasons can be -

Portfolio Diversification

Most investors prefer to invest in stock and bonds. The main reason of diversification is that it can protect the money during recession. So portfolio with gold provides more security to the investor than the portfolio of stock and bonds.

Inflation Hedge

Market cycle moves up and down. But for the long run gold can keep its value intact.

Risk Management

The gold is less volatile than the stock and bonds. So it helps to reduce the risk. So the risk of losing money due to financial market crash is less.

Other than the above points there are some other advantages of gold investment, these are

Preservation of value

Gold relatively scarce metal, it can’t be manufactured so the gold price is rising every year. The average annual growth of the gold is 13.5%. As the dollar is collapsing so the investors need a safer option to protect themselves from the loss and gold can provide the opportunity to preserve the investment.

Less volatility

As it is a scarce metal so there is inelasticity in supply of gold. As result of this the chances of devaluation is less.

Demand

Gold is a precious metal so the demand for gold increasing and that makes the investors to invest in gold.

Liquidity

Gold is considered most liquid tangible asset in the existence. Gold is also considered as the internationally accepted medium of exchange.

Rules

Generally gold is not affected by the changes of Government rules and regulations of individual country.