The world is widely seeing the trade of gold in different forms and gold has held its strong place in the modern economy too. When you see everyone are buying or investing in gold, you have these two questions in your mind. What is the purpose of gold? and why do investors still bother to invest in gold? To understand the answers to these questions, it is good to start understanding how gold has gained the importance which it has got today. Here is the complete answer for your question why should you invest in gold?
The importance of Gold in the Modern Economy
Like currency, gold is not involved in the daily transactions. Though gold is not used as a transaction media anymore in the modern economy, why does gold is given so much of importance? Gold is considered to be a wealth factor worldwide. To validate this point one need to look into the reserve balance sheets of central banks and other financial institutions like IMF (International Monetary Fund). In today’s situation, these organizations alone hold one-fifth of the world’s above-the-ground gold. Further, they are also taking efforts to add more gold to their present gold reserves.
Gold Protects Your Wealth
It is economically and logically true that gold preserves the wealth. Since so many generations the gold has made many people rich. Gold can sustain you in a wealthy position. Dumping the money equivalent to gold would not have the same value as gold. The money value depends on the global economy but gold retains its value forever. For example: If you buy a piece of gold for Rs. 500 ($10) and saved it for 10 years. Now, with the present situation the piece of gold can be sold at a price 20-25 times higher i.e. Rs. 2500 ($250). Whereas if you would have got Rs. 500 ($10) in your pocket and saved it for 10 years, you cannot get the same price what gold has got.
Gold the Safe Investment
Unlike other investments, gold might not give a booming return. In the scenario, there are political and economical uncertainty prevails on various parts of the world. In a global economy, a crisis in any part of the world would have its impact on the rest of the world. The history has full of changing times and collapsing empires. On those periods, gold was the only resource to escape from the turmoil and to protect their wealth. There is no change of place given to gold in the modern economy too. Million years of history of gold hints you the importance of investment on gold.
Different Ways of Saving the Gold
The major advantage we have got today which was not there hundred years back was the forms of gold. We can save gold in different forms. Investment in gold can be made in diversified methods. Here are the few methods and forms to invest in gold.
- Gold Jewelry
- Gold Bullion
- Gold Futures
- Gold Companies
- Gold ETFs
- Gold Coins
- Gold Mutual Funds
By investing in gold, you can be sure about the minimum security irrespective of inflation or declining in U.S. dollar rates. Gold is not directly related to stocks, bonds and real-estate which reduces the risk of your investment. There are advantages in every investment option. If you want to have physical gold with you then just buying shares of the gold mining company will not enough. Rather, look into investing in gold coins, jewelry or gold bullion. All the above details and explanation is the answer why should you invest in gold.