Gold price by Investorocean.com
Is Gold a Good Investment?
During the peak of 2020 pandemic situation, the market saw its worst ever crash in the recent years, however while every industry and stocks and assets fail to perform during the period and even after that, Gold remained one of the most sought after acquisition for investors. With its easy liquidity, gold has always remained one of the most preferable option for investments since ages. Even after the stability in the market, gold prices have regularly shot up and that is primarily because of the low rates of interest, which has encouraged gold purchase for investors.
Gold has act as a hedge against inflation when in a worst-case scenario the value of the currency in the market gets so inflated that the gold could be the controlling standard of finance flow in the market. Be it physical gold, which is tangible, or the intangible digital gold investment, it has proved to be a guaranteed instrument for wealth creation.
Investment in gold along with other stocks or equities gives you that assured diversity that acts as a safety net, if and when the market crashes or does not performs up to expectations.
What to Keep in Mind while Making Investments in Gold?
Gold has always enjoyed the status of being one of the most preferred investment option. Without the differentiation of class, it has proved to be an acquisition of the masses, rather than limited to certain class of the society. While it is tempting to buy gold blindly for a certain value, you should keep in mind while making investments in gold few things.
Different Type of Gold Investment
There is more than one type of gold investment, which includes physical gold in the form of bars, bullions, bricks, coins or manufactured jewellery; also digital gold or E-gold which is like physical gold itself but with someone else assigned to store it for you; or Gold ETFs, Mutual funds or Sovereign Gold Bonds. Each of this different type of gold has different investment plans and advantages, so choose the one, which suits your investment strategy.
Current Price of Gold
An investor must know the trending price of gold so as to avoid acquiring it in a value higher than its expected valuation, which is expected to correct itself in due course. You must always invest to get the highest return on interest (ROI)
Purity of Gold
While there are hallmarks and the BIS which is assigned to certify the purity of the gold that you are buying you must know the different carat category of gold and know the extra alloy mix, additional charges etc. for the correct valuation of your gold investment. In case of gold, which is not in physical form, however, the purity is assured by the issuer of the bond/stock or by the manufacturer, itself and you need not be worried about it.
How to invest in Gold
Since the conception of the word “Investment”, many commodities have added on to the list but Gold has remained at the top since the beginning. Its reputation, rightly justified, extends throughout the world. In India particularly gold has been a favoured investment even for the lower class. Modern time witnesses many options to invest in gold other than the traditional jewellery form. Th various other opportunities includes:
One of the most popular form of investment, gold bullions are particularly favoured by bigger investors. These are purest and certified units of gold available ion different sizes.
When you think of gold coins, they are a convenient form of gold investment. Usually bought as gifts by Indians during festivals they are also popular as an investment as they could be available in the smallest of unit of gold like 0.5 grams.
Digital gold or E gold is no less than owning physical gold, as when you decide to invest in E gold, you authorise an intermediary or the seller themselves to hold the gold for you. You can have them converted to physical gold whenever you feel like and also being a digital entity; you never have to worry about its purity.
Gold ETFs or Mutual funds are traded at the Exchange much like stocks. Combine gold with other commodities in your portfolio and have the advantage of having a hedge against market crash or inflation itself. Gold liquidity is its most important pushing aspect.
Sovereign Gold Bonds
Sovereign gold bonds are government issued bonds through the Reserve Bank of India. Since issued by the most trusted entity, the purity of gold is uncompromised.
How to invest in Gold
Gold, being the hedge against a crash or inflation that it is, is probably the most practical investment option in the market. With gold available in different form for investment including physical gold, gold ETFs, mutual funds, and sovereign bonds etc. the possibilities with the investment on the yellow metal is endless nowadays.
However, few aspects or facts need to be considered before you start to trade gold.
Follow the Trend!
Like any other commodity or equity, there is a right to trade in Gold too, learning about the trends and the performance of gold will help you trade better.
Understanding Different Gold Investment!
Different investment such as physical gold, digital gold or gold ETFs are similar only in the terms of being a gold investment; each investment has a unique nature making it different from other. Factors such as taxation, cost, safety, practicality etc. differentiates different gold investment.
What Affects Gold Prices?
Acquiring the knowledge about the factors that affect gold prices will help an investor to involve in better trade for gold in any form. Factors such as volatility, global movement, central reserve, interest rate etc. affect the pricing of gold.