1. Stable Price

Gold prices do not fluctuate much even during a crisis compared to other assets like stocks. Investors thus prefer to add gold to their portfolio to take advantage of the stable price and steady growth in value.

2. Easy To Buy

It’s easy to buy gold from any trusted jeweller if you have the capital required. But it’s important to buy gold that has assured purity. You can buy gold in the form of jewellery, gold coins, or gold bars.

3. Better Versus Inflation 

Fixed deposits cannot outperform inflation like gold even though both of these investment options are preferred traditional assets. Historical data

1. Stable Price

Gold prices do not fluctuate much even during a crisis compared to other assets like stocks. Investors thus prefer to add gold to their portfolio to take advantage of the stable price and steady growth in value.

2. Easy To Buy

It’s easy to buy gold from any trusted jeweller if you have the capital required. But it’s important to buy gold that has assured purity. You can buy gold in the form of jewellery, gold coins, or gold bars.

3. Better Versus Inflation 

Fixed deposits cannot outperform inflation like gold even though both of these investment options are preferred traditional assets. Historical data suggests that gold does well against inflation during economic highs and lows.

In fact, when the economy goes down, currency prices go down. If the currency has little to no value, gold prices will soar simply because gold will be priced using the same currency unit. This implies that gold is one of the best ways to hedge against inflation.

4. Steady Growth

The fact that it is a finite metal doesn’t seem to affect the price of gold. Its value is known to consistently rise over the long term. However, gold prices can be volatile over the short term. 

5. Easy Loans

Gold can be used as collateral for secured loans. It is easier to get a loan against gold because it is a tangible asset with a high value. This can be helpful in the time of an emergency. 

Apart from these 5 benefits, the sentimental value of gold cannot be overlooked. Gold is often passed on through generations and it is associated with weddings and other such meaningful events. 

1. Security Concerns

Physical gold assets like jewellery are always prone to theft due to high prices and value. Digital gold could be an option for investors who want to get the same benefits of physical gold without security concerns. 

2. Storage Concerns

Storing physical gold in the form of jewellery or coins can be a hassle since: 

• there’s always the risk of theft and robbery
• It may need a dedicated safe  
  

Alternatives like digital gold, gold ETFs, etc. do not carry storage concerns as they are paper gold investments.  

3. Making Charges

Gold may be easy to buy and sell, but it comes with commission issues. Making charges may increase the overall cost of your gold jewellery purchase. You might even have to pay a fee while selling your gold. 

Gold ETFs fare better in this aspect. Gold ETFs invest in gold bullion and can be bought and sold like shares. In general, ETFs carry a low expense. 

So if you want to invest in gold without paying the making charges, your options include the likes of Gold ETFs, sovereign gold bonds, digital gold, and others.

4. Purity Concerns

The actual value of gold lies in its purity and is measured using ‘Carat’ (K). 24K is the purest form of gold available. Purity concerns can be avoided if you purchase gold from a reputed and trustworthy seller. 

Furthermore, you don't have to stress about purity concerns if you invest in paper gold as they simply track the price of gold bullion.

5. No Passive Income

Physical gold investments do not generate passive income like stocks, mutual funds, or P2P lending. This could be a concern if you’re thinking of retiring early or looking for a way to supplement your income with your investments. 

The only way to get a profit out of your physical gold investments is by selling them.