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Investment in Gold for the Year 2020

Author: Himani Singh
by Himani Singh
Posted: May 07, 2020
How can you do Investment in Gold?Introduction

Investment in Gold is an age-old method that humankind has followed from the time of the barter system. Barter system was a method through which commodities were exchanged for commodities. You can buy grains, clothes and other daily necessities through gold.

Gold has always been given a lot of importance due to its natural condition and its utility. Gold can be molded into jewelry, coins, bars, thin sheets of gold leaf, etc… It can be dissolved after formation and again constructed into another beautiful form.

History of Gold

Gold was found to human beings, thousands of years ago when a child discovered a shiny substance in a creek. Gold made itself a unique and valuable metal through its importance its long-lasting shine, easily convertible found in a manner that can be molded as per the user and their requirement.

Gold was a symbol of wealth and accumulation among people. the more gold a person had the richer he became and was respected in the society. Gold was a metal that can be easily traded and was in high demand. In the time of rulers, the king used to hoard gold as a form of wealth, if they won any kingdom, tons of gold, were given to them as a token of protection.

India was a country named "Golden Bird" where kings and western rulers constantly raided this beautiful country for its immense wealth of Gold.

Investment in Gold

Investment in Gold is a medium to invest in your future through commodities. The price of gold has been constantly increased over the past years.

The above chart represents the gold price which has constantly increased to more than 3 fold from 1980 to 2013. the chart is making an upward trend market. there is a rule in investment that follow an understand the charts. Charts can take you to the past, they represent the present and can also lead you towards the future.

Prices in Gold has constantly taken an upward move with few corrections leading to cater the attention of lots of investors.

When the world was facing a global crisis in the year 2008, Gold was still reaching its peak. The crisis cannot lead the prices of gold to reduce in a severe downward trend as compared to the share market.

Ways to Make an Investment in Gold

Investment in Gold can be done in two ways:-

  1. Physical Form or Traditional method
  2. Paper Form or Digital method
Physical Form

Physical Form or traditional method is an age-long method of investment in physical form where you buy gold and store it in your house, locker, or any other place you find it to be safe and secure.

There are three types of physical holding of gold as:-

Gold Coins

People hoard gold in the form of gold coins of a particular weight, the price of gold is calculated in terms of its weight. Gold coins are kept by banks or individuals for easy holding of the physical form of gold. these gold coins can be easily traded in the market for money and in times of difficulty as leverage, for taking money in the form of debt.

Hoarding of gold coins is a traditional form of investment of gold and people prefer to store it in the box and easy and proper storage.

Gold Ornaments

The dream of every woman and man to have gold ornaments. This dream and constant desire for gold has increased the value of gold and its prices. No marriage is complete without the bride and groom showcasing their gold ornaments.

There are festivals where people buy gold as a sign of good omen in various cultures and traditions.

Times have changed but the love for gold is still stagnant and increasing, people love to wear gold in their daily life. Gold jewelry or ornaments is considered a sign of wealth in the family as an alternative to money.

Answer this question:-

"Do you fantasize yourself with wearing lots of gold jewelry in your wedding?"

Well the answer, will also let you know why the prices of gold are constantly increasing.

There are various gold schemes that many jewelers place like an installment of money every month and in the 12th month the same installment would be paid by the jewelers and any kind of jewelry can be purchased through that money.

Gold Bullions

Gold bullion is another form of Investment in Gold. Gold bullion is an alternative to those who want to hoard gold in huge quantities. Gold bullion or Gold bars is hoarded by many countries in huge quantity in the form of wealth and can be traded easily or converted into money.

Paper Form

Investment in Gold can also be made through paper format where people who do not want to hoard gold in physical form can go through paper form of investment. The disadvantage in investment in Gold in physical form is that it can be lost, someone can steal or the place of storage can be a hurdle.

To avoid this issue, the paper form of investment is a trendy alternative. People are now investing in various forms of gold schemes or gold funds.

Exchange-traded Funds(ETF)

Exchange-traded funds means that as you invest in the share market through stock exchange (National Stock Exchange and Bombay Stock Exchange) in a similar manner, you can invest in gold through exchange-traded funds known as MCX (Multi-Commodity Exchange).

You can open your account with any of the stockbroker and have a Demat account where you can invest in gold stock. Gold shares are traded at the current price of gold with an investment of small as well as large quantity based on your investment choice.

Investment in Gold through stock exchange is a convenient and easy way as compared to the physical hoarding of gold. There is transparency in buying the paper gold and can easily be converted into cash liquidity.

Gold Mutual Funds

There are options to invest in gold through regular Systematic Investment Plan(SIP) in gold mutual funds. Many large financial institutions have come up with investment in gold mutual funds leading to higher returns in even in gloomy times.

Investment in gold is an alternative to the stock market and can be a diverse portfolio for your investment plan.

Digital form of Gold

Digital Gold is a format where you can but gold like gold coins, jewelry. bullion in digital format. you can as less as 1 gram of gold to as many as per your requirement. Various organization has come up with digital Investment in Gold like Kuvera, Motilal Oswal, Paytm, etc.

What’s your choice?

Question Clubs have gone through various methods and options for you to choose for in Investment in Gold.

You can go through your options and research to invest in any of these available choices. The choice you will make today would implement your return on investments.

"Every investor is interested in the interest he gains on the investment and not in the principal amount."

About the Author

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Author: Himani Singh

Himani Singh

Member since: Apr 16, 2020
Published articles: 16

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