The shiny, valuable, and precious metal is the favorite metal in every house in India. The gold market has seen a tremendous increase in demand and prices over several years. There was a time when people bought gold at 63 rupees per 10 grams. Now, the same 10 grams of gold cost over 71,000 rupees.
Speaking of investment, every investor has their reasons to invest in gold. Although, there is always a question in mind, How to check if gold is real? before investing in gold. There are plenty of reasons to invest in gold. Gold not only acts as jewelry but diversifies an investment portfolio. Moreover, gold acts as a hedge against economic uncertainty and inflation. To have a better understanding, lets navigate why gold is a smart investment in the future.
Gold holds great value in every aspect. Unlike coins or paper currency, the value of gold increases with time. People also see gold as a way to preserve their wealth from generation to generation. Since the time of rajas and maharajas, the kingdom valued precious metals like gold and silver.
Known for its rich history and value, people use gold for almost every occasion. Alongside this, major industries have real-life applications of gold. Gold also has some unique properties. From a bright yellow color, gold is a good conductor of heat and electricity. This is why major industries use gold in high-end machinery.
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Since last year, the gold market has turned a new leaf and earned more than expected. Let's explore why investing in gold is smart for your portfolio.
The U.S. dollar is one of the most important currencies in the world. In India, we always wait for the drop in the U.S. dollar as it makes gold cheaper. On the other hand, when U.S. dollars increase, the price of gold automatically rises. As a result, the change in U.S. dollars is a strong reason to invest in gold. At present, the market has a strong U.S. dollar, which is making gold prices high.
Gold has always been used as a hedge against inflation. This is because the price of gold tends to rise as the cost of living increases. Investors and individuals have often seen a rise in gold prices during high inflation. This happens when fiat currency loses its purchasing power. Since gold is priced in such currencies, this results in high prices.
Gold has a good and high store value. Analysts suggest buying more gold these days as some believe their local currency is losing value. Moreover, market conditions are changing daily due to geopolitical and other reasons.
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Just like gold can be an inflation hedge, it also protects against deflation in the nation. Deflation is a period when prices decrease, and the economy is burdened by excessive debt. There was a case when the Great Depression happened. During that time, the purchasing power rose as other prices dropped sharply.
During times of geopolitical uncertainty, gold retains its value. Because of its power of retention, gold always protects during such times. Whenever tension rises, gold is considered a crisis commodity. Moreover, gold sometimes outperforms in comparison to other investments.
Gold is one of the best assets for portfolio diversification. However, gold has a negative correlation to stocks, as seen over the years. In the late 1970s, the market was great for gold, but stocks were not doing well. Similarly, during the 1990s and mid-2000s, the market was doing really well for stocks while gold was not that great. This is why analysts suggest combining gold and stocks in the portfolio to get steady returns.
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The demand for gold is rising daily for many reasons. Whether individuals or large industries, everyone uses gold. This ongoing demand raises prices and makes gold attractive as an investment. In fact, the market is seeing an increase in demand for gold trusts and ETFs across the nation.
As attractive as gold looks, the gold market always faces scarcity. Since the 1990s, the supply of gold has been limited. It is not like we can print gold like paper money. The supply of gold depends on mining output, which makes it less susceptible to description.
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Being one of the safest assets in the market, gold always offers scope for capital appreciation. Despite changes in the economy or geopolitical risks, gold is famous for its stability factor. Hence, investing in gold offers stability and always scope for capital appreciation.
Now that you know your reasons for investing in gold, you should always know how to check whether gold is real. Here are a few quick ways to identify:
a. Always check for stamps or hallmarks if you are going for gold jewelry.
b. Know your common purity marks, which are 24-karat, 22-karat, 18-karat, and more.
c. Is real gold magnetic? Well, pure gold is non-magnetic. So, placing gold near a magnet can also help you test
Just like these, there are more ways to check the purity. Certified diamond buyers in Delhi NCR like 24Karat and others check Karatmeter and other techniques to identify the same.
There can be multiple reasons to invest in gold. Investors often use gold during hard times or sell gold for better investments. Be it geopolitical tensions or portfolio diversification, gold has a proven record of being a smart investment.
Still searching for the best place to sell gold and silver in Delhi NCR? Connect with 24Karat today!
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