If you have not bought gold, then in the true sense you are neither aware of history nor economics. This is the statement of American billionaire investor and fund Raymond Thomas Dalio. This shows why gold is so important traditionally. Let us understand why it is important to invest in gold and what are its benefits.

Gold has been valuable for centuries.
Gold has maintained its value as an investment for centuries. Ever since gold was discovered and humans learned to trade, gold has remained the most integral part of human civilization. Countless wars were fought for it, and empires were formed and disintegrated, but its importance has not diminished. It has always remained a symbol of prestige. For kings and emperors, it was a way to fill their treasury, and for the common people, it was a way to wear jewelry. This is the reason why gold was valuable even centuries ago, and it is still so today. In a country like India, gold also has a special cultural significance.

Diversity in Portfolio
Gold brings diversity to your investment portfolio. It helps in risk management for your portfolio in times of instability and uncertainty. In case of any war or tension, the stock market starts falling and economic uncertainty increases. In such times, the importance of gold is known, because its prices rise. This compensates to some extent for the loss incurred in stock market investment.

Easy to take a loan against gold
Sometimes it is difficult to take a loan during a financial crisis. But, if you have gold, then you can easily take a loan. Banks and non-banking finance companies (NBFCs) also consider it the safest loan, because there is very little scope of NPA in it. They can easily recover by selling gold and they will not suffer any loss in this. At the same time, the consumer also easily gets a loan against gold at a relatively low interest rate.

Protest against inflation
Gold has always been the most effective weapon against inflation. This is the reason why central banks around the world, including RBI, have increased the purchase of gold. Of course, the stock market or other types of investments can sometimes give better returns than gold. But, there can be a big stagnation in them, which can last for a long time. However, this is not the case with gold. Its price always keeps increasing with time.

Recognition as a universal currency
Gold is also recognized as a universal currency. When Russia attacked Ukraine, the Western countries led by America seized its foreign exchange reserves. The value of the Euro and Dollar that Russia had became zero. But, if Russia had created a gold reserve instead of foreign currency, its value would never have become zero. Even if the price of gold falls by 30 percent at once.