Gold has always been considered as one of the safest investment avenues in India. It has been proved time and again that spending in gold is a safe bet, whether the economy is booming or is facing a slowdown. Its importance is increased by the fact that in India, the yellow metal has yielded more returns than any other investment option. Currently, it is priced at around Rs. 32, 000 per 10 grams in the market, and is believed to yield higher returns in the near future.
Why invest in Gold?
1) Protection against Inflation
As inflation increases, the prices of precious metals like gold also increases and so investing in gold provides protection to investments against rising inflation.
2) Good option to diversify portfolio
It is a rule of thumb in the world of investment to never put all eggs in one basket, instead, it is advised to diversify the investment portfolio. So, investing in gold can help an investor to diversify his investment portfolio as it is a low risk option and provides stability to the portfolio.
3) Quick liquidity
Liquidity refers to the time taken by an investment to be converted into cash. The less time it takes to convert an investment into cash, the more liquid it is considered to be and vice versa. When compared to other forms of investments, such as land or shares, the yellow metal comes out to be highly liquid. It is because of the reason that metals such as gold can be sold even in tough economic conditions as they are considered to be valuable assets.
4) Surety of returns
Over a long period of time, precious metals like gold retain their value and have thus earned the reputation of being safe investments.
5) Global recognition
Gold has an intrinsic value due to which it is recognized globally as an investment alternative. Its global acceptance makes it an investment option which can be bought and sold easily across countries for the same value.
6) Can be used to raise loans
For long, gold has been used by households in India as the most common form of availing secured loans. Now-a-days, there are plenty of financial institutions which offer loans against pledged gold such as Muthoot Finance or Manappuram Gold loans. Additionally, almost all banks provide loans against gold. Gold loans are also considered as an alternative to taking personal loans. As compared to personal loans, these loans are easy to avail as they have low documentation requirements and lenders approve gold loans as fast as in 24 hours.