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Why to Invest in Gold

Gold is the most malleable of all metals and world’s oldest international currency. Gold is genuine wealth, it is real money. Paper currencies are normally inflated away and eventually return to its intrinsic value that is zero. So far no paper currency has survived intact over a longer period whilst gold has represented real money for several thousand years. Over time gold has represented an excellent investment that holds it value in real terms. In particular, gold appreciates during periods of high inflation and financial instability. As there is limited supply of gold it cannot be printed to finance the deficit spending of governments. Gold stored outside the banking system should be the foundation of the wealth pyramid for high net worth individuals.

 

The consumption of Gold produced in the world is about 50% in jewelry, 40% in investments, and 10% in industry.  India is the world's largest single importer and consumer of Gold, as Indians buy about 25% of the world's Gold, mostly for jewelry.  Indian households hold more than 11% of the global Gold stock.



Technically speaking, one look at the long term chart of Gold Comex reveals that Gold was in a secular bear market for almost two decades from 1980 to 2000. Uptrend in Gold resumed in early 2001 and peaked out in late 2011. Gold now is in a corrective bear market and providing excellent bargains for investors to accumulate it.  Fibonacci retracement's of $1100 to $900 would be strong support areas.  As per time analysis, Gold has still 10 more years of bull run left before it eventually tops out. Its uptrend can resume again in next few months. Targets of Gold remain well above 2000$ in years to come.

 

Indians have great affinity to physical Gold and recent correction is great opportunity for them to buy for long term. Investors however need to lookout for the quality of Gold and also security aspect of it.

 

Following Articles by World Gold Council and on Wikipedia would lend more weight as to why one should be investing in Gold.