Gold: Why is buying gold becoming a popular trade

Why is buying gold becoming a popular trade amid the recession and the decline of China’s economy in America?

Gold

As the dollar’s value declines, the demand for gold grows, leading to an increase in the price of gold. In such a situation, investors start investing their money in gold.

An economic downturn is being encountered by both China and the United States, the two largest economies globally. On one hand, unemployment and inflation have risen so much in China that the government has stopped releasing unemployment figures. Meanwhile, people in the United States are also quite distressed due to inflation and the continuous loss of jobs in their country.

Amidst all this, there has been an acceleration in buying in the gold market. Between inflation and unemployment, more and more people are investing in gold. However, in the first half of the year 2023, there were concerns about the deteriorating economy in the United States, and it was feared that a recession could occur there by the end of 2023 or the beginning of 2024.

Nevertheless, most of the Wall Street banks have now lowered their recession forecasts and it is now believed that the economy there will not experience a significant shock.

Why is buying gold becoming a popular trade:

Since reaching a low point in 2007/2008, the value of the American dollar has experienced fluctuations, but in the past few months, its value has significantly decreased in the global market.

On the global COMEX market, the price of gold increased by 0.3 percent from $1,900 per ounce to $1,902.63 per ounce. The price of gold has been the highest in the last five months. Similarly, American gold became 0.3 percent more expensive, reaching $1,931.70.

It is believed that both gold and the dollar are the safest assets. However, gold and the dollar have an inverse relationship with each other. In simple terms, whenever the value of the dollar decreases, the demand for gold increases, and the price of gold also rises.

The reason for the increase in the price of gold is that whenever the USD depreciates, investors put their money into other safe commodities, and gold ranks at the top of the list of secure investments.

What are the benefits of investing in gold?

Amidst the current market turmoil, if you purchase gold for the long term, you can expect good returns. In fact, when it comes to investment, most people prefer investing in gold. Investing in gold provides them with various advantages.

The biggest advantage of buying gold is that the investor’s money remains secure. In the future, if needed, you can also take a loan against it. Additionally, in the last five years, gold has gone from 31,000 rupees to 61,000 rupees. This means that gold has provided returns of more than double in the last five years.”

Why are more and more people buying gold?

In simple terms, gold is the oldest commodity in the world, and through it, anyone can make purchases in any country. Besides, looking at the history of investing in gold, it has provided impressive returns. The price of gold always tends to rise.

In countries like the United States and China, where inflation is at its peak, many people are investing in gold because it also serves as a hedge against rising inflation. As inflation increases, the price of gold tends to rise. Furthermore, you don’t need a significant amount of money to invest in gold. You can invest in gold with a small amount of money as well.”

Functions like insurance during times of crisis:

Gold works much like insurance during times of crisis. During the COVID-19 pandemic, when the economies of most countries were struggling, gold provided a lifeline for many individuals. Additionally, if you possess gold, you can quickly avail of a gold loan at a lower interest rate. This loan is more affordable compared to personal loans.

Gold rates in India:

August 24, 2023, is a good day for those looking to buy silver in India, as there has been a decrease in the price of silver on the Multi Commodity Exchange. Meanwhile, there has been a slight increase in the price of gold. On the Multi Commodity Exchange, gold was trading at Rs 58,850 per 10 grams today, showing an increase of Rs 31.

Speaking of silver, it was trading at Rs 73,540 per kilo for September futures, experiencing a decrease of Rs 464. Silver opened at Rs 73,480 per kilo today and reached a high of Rs 73,900 per kilo during the day. As for gold, it opened at Rs 58,750 per 10 grams in the commodity market and reached a high of Rs 58,868.

International market prices for gold and silver

Similar to the domestic market, there is also an upward trend in the price of gold in the international market. On Thursday, in the international market, gold was trading at $1,921 per ounce, marking a 0.36 percent increase. Its day’s low level was $1,912.90, and the high level was $1,922.80 per ounce.”

 

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