Commodities – Gold

Of all the precious metals, gold is the most popular as an investment.Investors generally buy gold as a way of diversifying risk, especially through the use of futures contracts and derivatives. The gold market is subject to speculation and volatility as are other markets. Compared to other precious metals used for investment, gold has the most effective safe haven and hedging properties across a number of countries.

 

Gold is respected throughout the world for its value and rich history, which has been interwoven into cultures for thousands of years. Coins containing gold appeared around 800 B.C., and the first pure gold coins were struck during the rein of King Croesus of Lydia about 300 years later. Throughout the centuries, people have continued to hold gold for various reasons. Below are eight reasons to own gold today.

 

A History of Holding Its Value

Unlike paper currency, coins or other assets, gold has maintained its value throughout the ages. People see gold as a way to pass on and preserve their wealth from one generation to the next.

 

Weakness of the U.S. Dollar

Although the U.S. dollar is one of the world’s most important reserve currencies, when the value of the dollar falls against other currencies as it did between 1998 and 2008, this often prompts people to flock to the security of gold, which raises gold prices . The price of gold nearly tripled between 1998 and 2008, reaching the Rs.12500/10gms milestone in early 2008 and nearly doubling between 2008 and 2012, hitting around the Rs.31000/10gms mark. The decline in the U.S. dollar occurred for a number of reasons, including the country’s large budget and trade deficits and a large increase in the money supply.

 

Inflation

Gold has historically been an excellent hedge against inflation, because its price tends to rise when the cost of living increases. Over the past 50 years investors have seen gold prices soar and the stock market plunge during high-inflation years.

 

Deflation

Deflation, a period in which prices decrease, business activity slows and the economy is burdened by excessive debt, has not been seen globally since the Great Depression of the 1930s. During that time, the relative purchasing power of gold soared while other prices dropped sharply.

 

How does one invest in Gold ?

 

We at Pindersson give you the option of buying and trading on gold in the following ways :

 

The most popular ways are as follows:

 

1. Buy shares in a company that produces gold.
2. Invest in gold futures and options.
3. Invest in gold ETF.
4. Invest in Gold Fund of Funds
5. Invest in Government approved Gold Bonds

 

“Apart from Gold, we provide you with a trading base for all commodities in all major trading exchanges. We have partnered with Vikson Commodities Pvt. Ltd to provide you with a seamless experience in all your broking requirements. Vikson is an Indian Stock Broking firm established in 1985. The Company is a member of the Bombay Stock Exchange (BSE), National Stock Exchange (NSE), National Commodity & Derivatives Exchange Limited (NCDEX) and multi Commodity Exchange of India Limited (MCX). It is a depository participant with Central Depository Services Limited (CDSL).”

 

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