There are many reasons why we shall look beyond conventional Fixed Deposits , PPF and high growth Shares and Mutual Funds. Gold is always seen as a thing to own and only for consuming as ornaments , for jewellery but seldom as an investment purpose , in fact silver also for that matter.
But now there are many reasons to invest in GOLD , just like people invest in Shares, Mutual funds , PPF , NSC and Fixed Deposits.
Reason 1: Stock Markets are becoming risky and uncertain
Stock Markets are in Bad shape for atleast short or medium term atleast. No one knows whats going to happen in 6 months or 1 year or 2 year. Long term may be good but still medium term perspective is not very clear.
Not only Stock Market , but whole of financial Markets are uncertain , if you consider problems like Inflation , dip in projected GDP growth of economy etc .
Reason 2 : It acts like hedge towards Inflation and Foreign currency
As Indian currency is gaining against Dollar and other currencies , Rupees is set to become more strong in coming years. Gold has inverse relation with Dollar.
Reason 3 : Its a relatively less known investment option and has high potential in future
Looking at history , and every time we see that a investment option starts becoming popular and by the time most people know about it , it already gives most of its returns and becomes a talk of past.
GOLD has started gaining attention as investment option and becoming popular and still in its middle stage , if not early.
So its the time to ride the boat.
Reason 4 : Future High Demand and less supply
In future gold is going to in high demand and its already in less supply , so according to the demand-supply logic the prices are bound to go up in near future. Indians account for 23% of world’s total annual consumption and overall global demand has increased 15% Year on year
Gold demands were on all time high in 2007 and expected to increase in coming years due to mismatch in demand and supply.
Reason 5 : More Diversification
Before some time back , diversification of portfolio was limited to Equity , Debt and Real Estate and some cash , so that your risk is spread across different class of assets. GOLD has evolved as another asset class and not it help in diversifying your portfolio.
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