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  • Mohammed Shaheen

THE HIGH RISE IN GOLD TRADING

Does your wealth deserve the best? Is that a question that runs across your mind every time you think to start up a new business or an investment for your second income? The thought of risking all your savings on your D-plan might leave you with the fear of losing all your earnings and savings.

We do know that in today’s pandemic-led world, all the business and financial sectors have seen a downfall. Paper currency has also seen a crisis and has been struggling to gain back its position at the financial market podium, but that looks like food for thought as it may take some time to get the things sorted. Meanwhile, the precious metal has seen an enormous turnover at the bullish graph and has maintained consistency in uncertain times. The gold trading has topped the charts for a real-time investor who is looking for consistent growth over a longer-term.


“IS GOLD A EVERGREEN NICHE?”

While you invest, you do keep a track of how the market will respond in nearby future or whether it is safe to invest at that time. According to the Google Trend, Gold is an evergreen niche where products and services will always be in demand. You get everything you need to start making money in the gold investment niche. Among all the available asset classes, gold is often considered a hedge against inflation. Inflation has been rising globally, becoming the biggest threat for investors. In the last 10 years, the yellow metal has generated an annualized return of 11% as compared to the average inflation rate of 6.3% during the same time frame. So it can be said that over the long term gold can act as a hedge against inflation.


GOLD IN TODAY’S WORLD

According to a study by World Gold Council, for every 1% rise in inflation, demand for gold rises by 2.5% and hence the price. Experts say gold should not be bought only when you expect inflation to rise, as no one would be able to time his gold investment with 100% accuracy. So it should be a part of your long-term portfolio and constitute between 10-20% of your overall investment portfolio depending on the individual investor's risk profile.


Even though gold no longer backs the U.S. dollar (or other worldwide currencies for that matter), it still carries importance in today's society. It is still important to the global economy. To validate this point, there is no need to look further than the balance sheets of central banks and other financial organizations, such as the International Monetary Fund.


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