If there is anything that has been equally valued and respected across all borders, it is definitely â€˜goldâ€™. In terms of history, gold was primarily and solely used for ornamentation, and it was not until 650 B.C. when people started to use it for making coins. This was followed by a long trend of using gold as currency.
Although now nobody uses gold as currency anymore, the valuable metal is still being bought for multiple reasons. Chiefly that is because economies and societies are still associating gold with a considerable monetary worth. Thus, it is still safe to say that gold is a metal we keep falling back on.Â
Given the increasing gold prices in Pakistan today, people now think to stop purchasing gold. Furthermore, with cryptocurrency getting so popular, people of the new age are bound to wonder why they should even invest in gold. So written below are some of the most pragmatic reasons to buy gold.Â Â
- Gold has a history of holding valueÂ
Unlike coins, paper currencies and many other assets, gold has successfully maintained its value for ages. Therefore, people worldwide see gold as a medium to pass and preserve the wealth of their families.Â
Since the beginning of time, people have valued gold due to its extraordinary physical and chemical properties. Gold is the rare form of metal that never corrodes and is highly malleable. As a matter of fact, the malleability of gold has made it ideal for making coins and pieces of jewellery.Â
- Gold is the weakness of the U.S dollar
Many business people and societies tend to convert their currency from rupees to dollars in Pakistan. That is because the American dollar is considered one of the worldâ€™s most reserved currencies.
However, if the value of the dollar falls, every other currency also declines. Thus it is safer to buy gold in direct circumstances.
- It forms an inflation hedgeÂ
With the price of everything increasing exponentially, the gold rates in Pakistan today are higher than ever before. With that being said, gold acts as an excellent hedge against inflation.Â
Over the past 50 years, everyone has witnessed the soaring prices of gold in the declining stock market. You might find it hard to believe, but a rise in the monetary worth of gold is quite commonplace because whenever a currency begins to lose its purchasing power, the price of gold increases with everything else.Â
In addition to everything, gold is considered a phenomenal store of value. Thus all Pakistanis are encouraged to invest in gold these days.
- It offers protection against deflation
To put it as simply as possible, deflation is described as a period of declining prices. It is when the countryâ€™s business activities take a hit, and as a result, the economy is overburdened with increasing debt.Â
The best example of deflation was 1930 when numerous countries suffered from bankrupt economies. To this day, that time is referred to as The Great Depression. However, even then, the gold price sharply soared!
- Prevents from geopolitical uncertaintyÂ
Gold retains its worth during financial crises and in times when there is geopolitical uncertainty. This valuable metal is sometimes also referred to as a crisis commodity because when geopolitical uncertainty rises, people flee to the safety of gold.
Gold consistently outperforms other forms of investment.
The Bottom Line
Although the price of gold is subjected to significant fluctuations, one cannot deny or underestimate its worth. Over the past many years, gold has served as an important hedge against inflation, and hence it will continue to be an investment worth considering.Â