Investing in gold is often seen as a safe bet, but it's important to understand the risks associated with this type of investment. Physical gold assets, such as jewelry, are always prone to being stolen due to their high prices and value. In addition, economic crises can affect gold prices, as can major discoveries of gold and seasonal events like the wedding season in India. Storing physical gold also comes with a cost, as it requires a secure space such as a locker at home or in a bank.
Furthermore, gold yields have been much lower than stocks in recent years, and investing in sovereign mutual funds can cause capital losses. There is also no centralized, regulator-approved list of gold traders. If there is a crisis in the market or the company that issued your paper gold is performing poorly, the value of your investments could erode. Despite all these risks, experts still recommend investing in gold due to its valuable nature.
Given the difficulties associated with physical gold as an investment, it would be better for an investor to look for other options such as gold on paper. Gold exchange-traded funds can be more expensive than physical gold itself, as they have additional management fees and come with other associated risks. It's important to understand the risks associated with investing in gold before making any decisions. By doing your research and understanding the potential risks involved, you can make an informed decision about whether or not investing in gold is right for you.