![]() Gold bars or gold coins: Gold coins and bars are sold by some banks and jewellers as a form of investment.These funds are listed on the stock market and can be traded using a demat account. Gold exchange traded funds: If picking up physical gold isn't convenient one can always invest in exchange traded funds (ETFs).The disadvantage is being able to keep it safe, which is why many individual choose to keep them in bank lockers. Besides the aesthetic value of gold jewellery, they are also considered a safe haven asset to tide against inflation or sudden economic adversity. Traditionally, almost all families in India acquire gold jewellery assets over time. Buying jewellery: One of the most common forms of gold investment in India is in jewellery.Having gold as part of your portfolio is a good investment decision. You could either pick up gold in its physical form ranging from gold bars to jewellery or you could invest in virtual gold or even trade gold in the form of a fund on the exchanges or in gold bonds. ![]() There are multiple ways in which one can invest in gold. The more difficult it is to mine for gold, the more expensive the commodity becomes. India has very few of its own reserves, such as the Kolar Gold fields, which are presently almost exhausted. Cost of production: Another factor influencing the price of gold is production cost.Economic stability: When there is economic or geopolitical instability, gold prices tend to rise as investors put their money in a safe haven investment like gold, considered a less risky asset compared to say the stock market or mutual funds.Demand and supply: Whenever there is global uncertainty, as was seen during the COVID pandemic, supply reduces and demand increases, significantly pushing up the price of gold.When the quantity of gold imports is higher, along with a weaker rupee, prices will rise. Prices of gold imports: The price of gold at the retail level is also influenced by imports, as India gets most of its gold from foreign nations.If the rupee weakens against the dollar, the price of gold will go up. Most countries hold their foreign exchange reserves in dollars. Currency exchange rates: Gold prices are sensitive to movements in foreign currency exchange rates, especially the US dollar.In recent times, cryptocurrencies like Bitcoin have been compared to Gold, for their similarity in being limited resources. Gold derives its prices from its rarity and relative difficulty in mining the metal. Prices of gold are comparatively a lot more stable compared to other precious metals.
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