The gold price is around Rs 56,000

The gold price is around Rs 56,000.

That is for 10 g of gold.

This is the highest ever price of gold so far.

In fact, in the last year, the price of gold is up nearly 50%.

The years before that, the price of gold had barely moved.

The previous highs in gold prices were touched around the last financial crisis in 2008.

Gold retains its value like nothing else. And that has been the case for thousands of years.

All major civilizations - from the Indian to Chinese to European - all treated gold as a reserve of value.

Gold is rare - so there’s scarcity - but not so rare that nobody’s heard of it. It is universally accepted.

It is always in short supply - 3000 tons of gold is mined per year - compared to 18,000,000 tons of copper.

It doesn’t corrode unlike iron, copper, etc.

It doesn’t have much use unlike iron, aluminum, etc. Only 10% of gold mined every year is used for things other than investing.

This is what makes gold very very appealing.

Most people really don’t have any actual use of gold. But they know others value it - everywhere in the world.

When investors feel scared, they don’t care as much about growing their wealth. They care more about not losing it.

And this is where gold steps in.

You could buy a flat in one city, but its price could be affected by so many factors. And, the number of people willing to buy your flat is also much lower.

Similar with stocks. Underlying fundamental reasons could make a stock unattractive. So the number of people wanting to buy it is relatively low.

Gold - the number of people who’ll buy it from you is unbelievably big.

This is why gold attracts so much attention when the economy isn’t doing well. And when the demand goes up, the prices go up.

So far, gold sounds really good - what better investment than this? You can sell it anywhere in the world, it stores value very well… great!

Why doesn’t everyone just invest in gold?

Because history also shows that gold hasn’t grown much.

Yes, there’s some growth. But it has been much lesser than what options like share markets have given.

In the last 100 years:
-Gold growth = 9000%. 
-US stock markets (S&P 500) growth = 41,500%.

Our own Indian indices Sensex and Nifty are relatively new. They weren’t there 100 years ago.

This is why seasoned investors invest in not just in only stocks or only gold, but across assets like stocks, FD, debt, real estate, gold, and so on.

How much of your investment should be allocated in each type? There, unfortunately, is no one-size-fits-all formula.

It depends on your financial conditions.