Why is Gold Important ?
The Rise of Gold Prices
The price of gold has been steadily increasing, reaching new all-time highs. Currently, a gram of gold is selling at ₹6,705, and a sovereign (8 grams) sells for ₹53,640. Experts predict that gold prices will continue to rise in the future. In India, gold is the primary form of savings for both the poor and the middle class. People consistently buy gold as a way to save money.
However, there is a debate. Some argue against buying gold, suggesting that investing in the stock market can yield better long-term profits. So, why is gold important, and why should we save in gold?
The Importance of Gold
Anand Srinivasan highlights that gold can protect us against the ongoing decline in the value of the Indian rupee. He emphasizes that while the situation might be different in the United States, where loans are easily accessible and the dollar remains strong, in India, the depreciating rupee makes gold a valuable asset.
In the U.S., the dollar is a dominant international currency, and individuals can secure loans quickly in times of need. Thus, gold might not be as critical an investment there. However, in India, the rupee`s value continues to fall, putting constant upward pressure on gold prices. This dynamic makes gold an essential investment for Indians.
Historical Perspective
Looking at historical data, gold prices in the international market have not risen dramatically from previous highs. Yet, in India, the price of gold in 2011 was around ₹2,600 per gram. Today, it has more than doubled. This significant increase demonstrates the long-term value of investing in gold. Therefore, the notion that one should not buy gold is misguided.
Conclusion
We live in India, where the rupee is likely to continue depreciating. Consequently, gold prices will keep rising, making buying gold a prudent decision.
This message from Anand Srinivasan serves as economic advice but should not be considered direct investment advice. Always consult your financial adviser before making any investment decisions to ensure they are right for your individual circumstances.
