Why Gold Is Considered A Good Investment: 5 Things To Know

Buying gold during Diwali in India is considered auspicious and is said to bring wealth and prosperity. One can buy or invest in gold in various ways, such as jewellery, bullion, coins, gold mutual funds, exchange-traded funds, etc., for wealth creation, gifting, or building a legacy.  

Here are some reasons why people by gold in the festive season. 

Rising Value 

Rising value of gold attracts buyers to the yellow metal. It acts as a hedge against market volatility and offers earning opportunity as its value increases. For example, its prices rose from Rs 62,550 per 10 gram last October to Rs 78,195 per 10 gram now, or up 28.74 per cent.  

Festival Discount 

Jewellery brands offer discounts and lucrative deals to attract customers during festivals. The deals include lower making charges, etc. These deals allow people to buy gold at a cheap price.   

Liquidity 

Gold can be easily liquidated any time. People also invest in gold for portfolio diversification and minimise the market risks or losses. Gold is considered one of the safest investment instruments as its prices do not fluctuate much. People also use the returns from gold assets to fund education, create an emergency corpus, or start new business ventures. 

Gifting 

Besides gold’s huge cultural significance, people also buy the precious metal for gifting. Indians traditionally gift gold jewellery items like necklaces, bracelets, chains, rings, etc., to their close relatives during festivals like Diwali. Many people in India, especially those who are employed, also use their Diwali bonuses to gift gold to their family members or invest in the gold market.  

Family Legacy 

Gold assets in India are also passed on from one generation to another as a legacy or inheritance. Many people buy this precious metal during the festival season when the jewellery brands offer a wide range of lucrative deals and discounts to procure them cheap and hold them for the long term. When the time comes for legacy planning, they distribute them to their respective heirs.