The precious metal gold has a unique and essential feature due to which it is one of the best metals of human beings. Starting from the use of the medical fields to that of the technological and the financial sector, gold has its importance in almost all sectors. Most of the houses in India, which covers about 80% of the total population, have gold in jewellery and coins. The gold loan has a unique feature as it acts as a stabiliser during a financial crisis like that, which is happening in the world.
Gold has a value that the goal itself has managed to preserve. In contrast, the prices of other things have fluctuated a lot. During this financial crisis, worldwide is facing a significant issue in maintaining the economy's stability. During this period, having the gold will help you remain safe as it will act as a hedger in this uncertain time. Nowadays, Muthoot gold loan is offering a low rate of interest to fight this crisis. The gold prices fluctuate but are in a pretty stable position in the stock market and the commodity market, due to which when the prices of the gold rise, people sell the gold available to have a good profit in the deal.
During international trading between countries like the US, UK, Russia, Australia, China, India, and France, gold is significant. Several requirements like that of technological development and utilisation like that of gold are used as a protective agent against heat in the spacesuits for the different space research agencies of the world. For maintaining the government reserves of the country to stabilise the economy and maintain the balance for any situation, gold reserves in the form of gold are required for which the trading is very much crucial from one country to another. When there is any difference in appreciation in the base currency on which the training will be done, the problem will negatively impact the home currency, which will depreciate. This is one of the significant reasons that during this time of the financial crisis and imbalances all over the country, every country is concerned about maintaining the stability of the economy.
If we look into the other scenario, we will find out that gold has an indirect relationship. When the rate of interest of several things falls, the people break the several types of deposits. With this broken deposit amount, they find it better to buy low gold following this friend's demand for the gold increases, raising the price of the gold in the market. They understand that when the interest rate is increasing and at that particular time, the selling up of the gold available will be a good option and provide a profit.
The traditional and cultural aspects in the Indian market about gold are very much different. Gold is used in the form of jewellery, especially during the time of the festivals. As people buy more gold during the festival season due to which the demand increases, and in return, the prices also get a positive effect to have an upward trend in the price graph.
The import and export between the countries are vital regarding the gold production and the international trade of the gold. Our country India contributes about 1% of the output of gold in the world. Still, on the other side, it imports a lot of gold to meet the different kinds of requirements for which the demand for the gold increases and for which the cost of borrowing also increases for which the gold rate increases.
Conclusion
Gold is also required in the medical uses to treat diseases like cancers and have found some traces in the initial stages to be fruitful in curing the patients. It is expected that further in future as more research and procedure will be developed and the use of the gold rice seeing the present scenario of the betterment of the treatment and the studies. To conclude, we can say that there are several types of financial risk like that of impression, in which gold is the only option that will save from any economic instability.
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