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For years, gold has been preferred as a top investment option due to its continued fast-paced growth. In India, it is a status symbol whereas; other countries see gold as a strong investment commodity. This article covers the 7 top benefits to consider before owning gold.
Quick Insights
Gold investment is one of the most attractive options among investors who look for low-risk and long-term returns.
Gold is available in jewelry, coins or bullion, ETFs, and equities.
Gold is not only a good investment option but also ideal for diversification and hedging.
There are quite a lot of benefits in gold investments. Below are the important 7 benefits one gets from owning gold:
There are numerous reasons to recommend a buy for gold, the primary reason being that anyone can buy gold easily.
Gold is available in various forms which can be chosen according to the investors’ risk tolerance and convenience. They are:
As per the historical chart analysis, precious metals like gold and silver rallied before the recession. So, it is always advised to buy gold ahead of a recession as it outperforms other investments.
Gold often tends to hold steady or move up in any kind of economic turmoil as investors panic in the economic uncertainty and look for safer investment options. During the recession, investors have to pull out their funds from equities and enter into the gold market which maintains its stability.
Provided the overall positive market sentiment, the price of gold is expected to surge and make new highs by the end of 2024. Currently, the gold price per ounce is trading near its all-time highs. Every dip in price gives buying opportunities.
Gold is considered not only an ideal option for investment but also for diversification of portfolios and hedging against inflation and currency fluctuations.
Gold is the best investment choice for retirement, as the price tends to move independently. Moreover, retirement-focused individuals usually have a long investment horizon and hence gold is the ideal option for them.
Depending on your retirement financial goal and risk tolerance, your financial advisor suggests adding a certain amount of gold to your portfolio for hedging against the volatile markets.
Investing in gold jewelry carries more risk than investing in pure gold. Unless one wears it, there is no point in purchasing gold jewelry because buying gold jewelry is a more expensive option. Below are a few reasons why gold jewelry is not a good investment option:
Gold is a very large market that attracts everyone, from institutional buyers to the general public. Investing in gold has been a well-known reliable strategy to protect one’s portfolio from any adverse economic conditions. Despite the few risks involved, gold has been considered a safe-haven asset to invest.
Gold price tends to rise even during high inflation and currency fluctuations, giving investors the safe and potential opportunity to invest. Over the past 15 years, gold has been outperforming stocks and bonds.
Gold coins are available in so many denominations from quarter-ounce to two or even more, but the in-demand collectible denominations are one or two ounces. Gold coins are usually not priced in line with their gold content. A licensed and reputed dealer sells it up to a 5% markup compared to equivalent gold bullion.
How safe is gold investment? Though the short-term trend is volatile, gold remains the best option for long-term investment irrespective of any form of gold you choose.
14k gold jewelry is considered more valuable and affordable than any other gold jewelry, yet the jewelry form of gold cannot be a good investment option because the markup is high.
Gold bars or coins or gold bullion is always the preference of everyone when buying gold comes to mind. Gold bullion is available in denominations of 1 ounce to 10 ounces. Since it is an expensive option to purchase gold bars, one should keep watching the price drop of gold to purchase at the lowest possible price.
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