Should You Invest in Gold This Time

For ages, gold has been considered the first and foremost choice of Indians as an investment channel. In a country like India, gold is an inherent part of all major occasions from weddings to childbirth and others. As the price of gold is increasing day by day, people tend to purchase gold and use it as a gifting material or an emergency fund. Since gold has easy liquidity, people find it easier to sell it at a jewelry stone in case of emergency and get quick cash.

Today there are many gold buyers available that provide quick loans to people against the gold. This gold basically serves as collateral for the availed loan amount. This is why gold tops the chart in the list of most profitable investment avenues available today. Another plus point with gold is that it is tangible. You can buy and store it in your home and sell it whenever required.

Gold tends to have a better cash-conversion ratio as compared to stocks and other investment tools, even in times of recession. Though gold prices also suffer ups and downs like other investment channels, the yellow has overall seen steady growth over the past several years.

If you are looking to invest in gold, it is necessary for you to keep a check on the gold rate forecast.

Gold Investment

Making an investment in gold is very much different from investing in bonds or stocks. Gold can be bought in either the form of coins or bullion, with a stamp on it. This stamp symbolizes the purity standard and the quantity of gold in the bar. The value of this gold tends to vary every day due to the changing supply and demand. These bullion bars or coins can be purchased from some banks, brokerage firms, dealers, and even online portals.

According to the best broker for trading, gold investors can begin by watching the spot price of the yellow metal, which is what can be purchased and sold at a particular time. The spot value of gold is measured per one gold ounce, kilo, gram.

Historical Prices of Gold

In regard to the historical gold prices, it can be found that the price of gold went up melodramatically in the 2000s. In the year of 2008, the price of gold moved from nearly $720 per ounce to more than $1,000 per ounce.5 When the global economy dipped further leading to recession, gold prices increased to nearly $1,895 in 2011 due to the increased demand. By 2020, gold prices reduced a bit from what they were a decade ago earlier but despite this, they continued to perform well in the middle of an economic slump.

The Current Scenario

If we talk about the year 2020, the extreme level of indecision seen in the world economy due to coronavirus outbreak which triggered demand for the gold. In 2021, the gold price is expected to progressively reduce as uncertainty has come down, but volatility is still on the upper end.

Investors' expectations for an economic comeback due to large-scale vaccination indicate a reduction in gold rates, however, any uncertain spike in 2022 that could promote volatility and vagueness may increase pressure on gold prices as low-to-negative interest rate scenarios and lenient monetary policies continue.

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What’s the outlook in 2022?

As the world is rapidly gaining its normalcy levels that were hampered due to the coronavirus outbreak, the value of gold also tends to go up in 2022. According to the experts, those who are willing to invest in gold in 2022 should keep a check on the gold rate forecast and take decisions accordingly. However, a majority of experts suggest a surge in the value of the yellow metal by over 60% in 2022.

One Last Tip

In general, it is recommended not to have more than a small part of our assets in gold. This can be considered as an insurance scheme. This would be really helpful if the stock market faces a downfall. This way, you can use gold to save some part of your investments. However, that is not guaranteed so double check before doing so.