New Delhi: 'If you have not bought gold, then you are neither aware of history nor economics.' This is the statement of American billionaire investor and fund Raymond Thomas Dalio. This shows why gold has so much importance traditionally. Let us understand why it is important to invest in gold and what are its benefits.

Gold has been precious for centuries

Gold has maintained its value as an investment for centuries. Ever since gold was discovered and humans learned to trade it, gold has been an integral part of human civilization. Countless wars were fought for it, empires were formed and disintegrated, but its importance has not diminished. It has always been a symbol of prestige. For kings and emperors, it was a symbol of filling their treasury, and for common people, it was a symbol of wearing jewelry. This is the reason why gold was valuable centuries ago and it is so even today. In a country like India, gold also has a special cultural significance.

Diversification in Portfolio

Gold diversifies your investment portfolio. It manages risk for your portfolio during times of instability and uncertainty. In case of any war or tension, the stock market starts falling and economic uncertainty increases. The importance of gold is known during such times because its prices rise. This compensates to some extent for the loss incurred in stock market investments.

It is easy to get loan against gold

Many times it becomes difficult to take a loan during financial crisis. But, if you have gold, then you can easily take a loan. Banks and non-banking finance companies (NBFCs) also consider it the safest loan, because there is very little chance of it becoming an NPA. They can easily recover by selling gold and they will not suffer any loss in it. At the same time, the consumer also easily gets a loan against gold at a relatively low interest rate.

protest against inflation

Gold has always been the most effective weapon against inflation. This is the reason why central banks around the world, including RBI, have increased the purchase of gold. Of course, the stock market or other types of investments can sometimes give better returns than gold. But, there can be a big stagnation in them, which can last for a long time. However, this is not the case with gold. Its price always keeps increasing with time.

Recognition of universal currency

Gold is also recognized as a universal currency. When Russia attacked Ukraine, the western countries led by America seized its foreign exchange reserves. The value of the Euro and Dollars that Russia had became zero. But, if Russia had created a gold reserve instead of foreign currency, its value would never have become zero. Even if the price of gold falls by 30 percent at once.