Top 8 Reasons to Invest in Gold

Investments form a crucial part of a financial portfolio. Investing in gold is not just limited to ornamental uses but also adds value to your overall financial portfolio. Today we’ll be discussing the top 8 reasons to invest your savings in gold.

Gold has maintained its Value

Gold has been used for currency, trading and as a financial investment since time immemorial. A lot of people invest in gold as they consider it a way to pass and preserve wealth from generation to generation. Throughout all these years gold has managed to maintain its value and even today is considered as one of the best methods of financial investments.

Holds Good Price When Foreign Currencies Lose Value

The gold rate in the UAE goes up when there is a drop in the prices of international currencies such as USD. During such phases, people start accumulating gold to ensure financial security.

Protection against Inflation

Gold acts as a financial cushion during periods of inflation and helps individuals to meet the increasing cost of living during such times.

High and Easy Liquidity

Gold is considered as an easy to liquidate the asset, this means that you can receive cash in return of gold very fast and easily depending on the current gold rate in the UAE. Other forms of financial investment such as real estate, mutual funds, etc. are much more difficult to liquidate assets.

Supply Constraint

The majority of the gold supply since 1990 comes from the sales of gold bullions from the vaults of the central bank. Gold mining has declined along with the decline in the supply from central banks. Reduction in the supply of gold has led to an increase in the gold rates in the UAE, which is why you should consider investing in gold.

Increased Demand

With an increase in the per capita income of several countries, there has been an increase in the overall demand for gold. The consumption of gold globally is deeply interwoven in cultures and traditions. A lot of people purchase gold and its products during festive or wedding a season which often leads to a hike in gold rates in the UAE.

Portfolio Diversification

The fundamental way to improve and diversify your financial portfolio is to choose and invests in ways that are not closely co-related to each other. Gold has a negative correlation with the stock exchange and other instruments of financial investments.

Geopolitical Uncertainty

Gold manages to maintain its value not only during phases of financial instability but also during geopolitical uncertainty. Gold is also referred to as crisis commodity mainly because people flee to its safety when instability rises. Due to the crisis in the European Union prices of gold experienced some major changes.

The Bottom-Line

Gold should always be included in your financial portfolio because the gold rate in the UAE tends to rise when there is a decline in the value of paper investments such as mutual funds and bonds. The gold rate in UAE may be highly dynamic but the long term value of gold is quite stable.