Why are gold and silver valuable additions to an investor's portfolio? Explained

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Also Read: Gold and silver prices Today on 14-03-2024 : Check latest rates in your city Here is more on why gold and silver can be considered in an investors’ portfolios. Investing in commodities requires an understanding of what drives gold and silver prices over the long term. Gold: The yellow metal is used mainly as jewellery and gold bars, apart from being considered for investment purposes as well.

As such, gold does well when the economy is slowing down, is in a challenging situation or is in a recession. Indeed, during the global financial crisis of 2008, EuroZone problems in 2011, periods in 2015-2016 when the Chinese economy slowed down, Brexit took shape, and demonetisation was implemented, gold shone brightly, even as equities nose-dived. Even in the COVID year of 2020, gold and even silver did exceptionally well, recording 28% and 44% annual returns in that calendar year.

Gold works as an inflation hedge and in some phases can give healthy returns as well. In the 10 calendar years from 2014-2023, domestic gold prices (MCX) have beaten consumer price inflation (CPI) in 7 of those years. In addition, gold also gains from rupee’s depreciation against the US dollar as international prices are denoted in the American currency.

Also Read: Gold: Correction in store, but shine likely to continue Silver: This precious metal has industrial uses apart from being a part of jewellery and even an investment avenue.

Silver is used in solar panels, electric vehicles, smartphones, manufacturing, soldering, television screens, bearings, mirrors and electronics. Given its linkage to many new-age industries and products, it is likely to be in considerable demand. It is more linked to the fortunes of the economy and does extremely