Why people love to invest in gold? Well, there are justified reasons behind it. Gold is considered as safe haven by the investors. Most of the central banks make their reserves in the gold which stabilizes the value of the precious metal. While on the other hand oil prices are volatile as their prices fluctuate due to geo-political and economic conditions of the world countries. Following are the most important reasons Gold is better investment option than oil.
Gold as Safe Haven
Firstly, it is essential to know what is meant by safe haven? It means any asset that is not affected by recessionary trends in the economy. It is an asset that protects the investors during the time of volatile market. We can take an example of Global Recession, when investors heavily invested in the gold. In 2008-2012 gold prices hit the record high of $1800-$1900/ounce.
Gold helps in the diversification of portfolio
Gold helps in diversification of the investment portfolio. Investors can easily enhance the profitability by including gold in their investment portfolio. All types of investors are attracted to gold as it is a unique, trusted and long term store of value. Investors all over the world use gold to diversify their portfolio. Gold helps investors to diversify their portfolio and decrease their long term portfolio volatility.