Gold
Gold is easily the most well-known of precious metal assets, as a store of value either as a reserve asset or jewelry. For over a thousand years, Gold has been used across the world as a legal currency and till the early 1971, the price of paper currencies was fixed against Gold.
The price of Gold is driven more by its requirements as a safe haven value rather than any intrinsic demand and supply factors. Historically held as a reserve asset by Central Banks around their balance sheet, it sees a surge in demand every-time there is rising economic, or political risk in the world. Central Banks held 34,000 tons of Gold as of Q1 2019 with 651 tons of Gold being purchased in 2018. This is the highest quantity of Gold purchased since Gold was freely traded from 1971. Such trends reflect the general sentiment on financial assets driven by factors such as
- Rising economic and political risk associated with other reserve assets leading to movement into safer and more liquid assets
- Negative real and nominal rates vs. a positive compounded rate of return generated by Gold.
- De-dollarization of the US Dollar
Investing in precious metals like gold can be a wise decision for those looking to diversify their portfolio and protect against market fluctuations. eBullion provides a convenient platform to buy gold and invest in gold online in India. With their digital gold service, investors can easily purchase and hold small denominations of gold digitally, eliminating the need for physical storage and reducing transaction costs. This makes investing in gold accessible and affordable to a wider range of investors while providing a secure and reliable option for those looking to invest in precious metals.
