Gold was, is, and will be considered one of the safest methods of investment for quite a while. Even a small variance or fluctuation in the global market will influence the prices of the yellow metal. From economic recession, war, and natural disasters, the rate of gold is highly sensitive to such kinds of events.
One of the vital aspects to comprehend is how demand and supply work. When the demand in the market is high and the supply is low, the price of that commodity tends to shoot up. While the demand for the product is low and the supply is more, the price will decline.
Gold has been deemed to be a secure asset and this translates that any sort of investment in gold is bound to grow in value over time, even when the market is turbulent. These events may be a result of war or economic crises. If the economy is under recession, investors seek shelter under safe haven assets like gold to mitigate their exposure to debt or equities. When the demand for gold rises north, the prices also skyrockets.
The movement of the stock market and gold prices is almost inversely proportional to each other. This implies that when the stock market goes south, the demand for a much safer asset like gold rises. This in turn would propel the price of gold in the global market. On the other hand, when the stock market performs well, gold prices take a backseat owing to the stock market’s healthy growth.
Gold - one of the most precious metals, is considered a secure investment option as the probability of it losing its total worth is impossible. Prices of gold may vary but will never collapse to zero. For this particular reason, the price of gold rises significantly during the event of an economic crisis or uncertainty. Investors are likely to be drawn to safer options compared to the ones that are vulnerable to multiple geopolitical and economic factors.
In order to diversify your wealth portfolio, you must invest in gold. In doing so, you always have an asset to support you in times of emergency. The yellow metal offers high liquidity and it helps you tide over your financial needs within a short period of time. It is recommended that you must allocate 10-15% of your portfolio to gold.
What is the right time to use your gold saving?
When you urgently require cash for gold
When the currency is weak
When all are talking about a recession
Gold prices in the wake of the Covid-19 pandemic have seen a price rise as the globe is witnessing an economic meltdown. During such unprecedented times, gold prices in India have shot up drastically. The yellow metal has been the only alternative when the economy shows signs of an economic collapse.
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