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Gold: A brief history and variation in investments.

Ever since the beginning of human civilization, along with evolution, the concept of value management grew up. Now, amongst the valuables considered by humans from ages of barter system through historical richness till the present day, gold occupies an integral place.

But what led to the consideration of the metal as a precious one?

  • Other than the value addition of the society, the factor that makes gold a precious metal is its elemental properties. Viewed in terms of its properties hereby, gold is one of the rarest metals to react with any element in the environment like oxygen, carbon dioxide. This neutrality makes it long lasting and stable to use, which, when added to its rarity if availability, makes it one of the most valuable commodities to possess and invest in.

Why should gold be considered for investment?

  • Gold is one such precious metal that holds high values all over the world, bought in one country is valuable enough to be sold in other country as well. While this opportunity is misused to smuggle gold, the universal value still remains an integral reason for a secure investment.
  • Gold is one such commodity that usually holds a positive growth in terms of investment. Contrary to the rise and fall of shares at a stock market, gold is usually found to be rather stably rising, although rare exceptions can’t be denied either – but this is no doubt that this is a more secure route for investment rather than in stocks.
  • Due to the value judgement of the society that places gold at a considerably high level as a precious metal since ancient times, this remains one of those investments that can be passed on from one person to another or to the next generation without any hassle of complicated documents. Therefore, this is one reason that makes it an easy commodity to invest in.

Ways of investing in gold:

  • Physical gold: Coins, Bars, biscuits of 24 carat gold ranging through different weights
  • Digital investment in gold: a recently developed method that allows the possession of pure gold virtually as a means of investment.
  • Through mutual funds
  • Paper gold: gold exchange trade funds, sovereign gold bonds

History of investment with regard to the last thirty years:

 Tracking the history of gold roughly around 1990, when the average gold price was  Rs 3,200/10gms on an average. While the entire decade saw a somewhat steady rise and fall in the rates, it never really took a very noticeable surge or fall. This pattern can be roughly traced till 2004, that saw the average amount at Rs. 5,850/10gms rise to Rs 7000/10gms in 2005.Then, during economic depression around 2008, the idea of investing in gold took a huge surge and became common from then. Ever since 2010, gold prices have been largely going up with average rise of Rs.2000- Rs. 8000 at times. Recent times have seen enormous rise in gold rates. While the COVID-19 pandemic has hit stock markets for lows at various sectors, gold rates are as high as Rs. 56, 000/10gms at the moment, at a much higher dimension than 2008.

However, it still can be said that gold , with its constant rise in value is always a safe investment option.




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