Primary demand for gold in India is for jewellery or coins followed by investments. Although not used in every industry, the yellow metal is considered very valuable, and its demand never stops.
Some of the reasons why gold is considered so valuable are as below:
• Valuable Over Time: Although gold rates fluctuate daily, its value tends to rise in the long-term. It is not affected by geopolitical or economic turmoil and remains valuable during emergencies providing liquidity as it can be easily traded. Gold is also a save against inflation and adds significant value to an investor’s portfolio. For this reason, people tend to invest and hold on to gold for a long time.
• Used in Industries: Gold is used in industries for specific manufacturing processes. Although not the same as that of retail consumption, yet many countries use gold for production purposes.
• Versatile: Gold is a versatile investment as it is available in several useful forms. It is popularly used as precious jewellery and artefacts or purchased in the form of coins, bars or bullion. It is also used in edible form or woven into fabrics.
• Gold Reserves: Many countries maintain gold as reserves to back paper currencies. These back paper currencies attain their values based on the value of the gold reserves that support them.
• Limited Supply: Gold is mined and produced across the world in limited amounts. Due to which, gold attains more value and gold rates per gram keep increasing.
• Tradition: Gold has various traditional values related to it. From gold coins been considered to be auspicious for festivals and occasions, to gold been used for financial transactions; it has passed down through the ages and prevails even today.