Why Gold is Safest Asset To Invest?

Why Gold is safest asset to invest?
The social and psychological repercussions of the Mumbai terror attack, lasting three long days is far reaching. And along with these losses, the economic losses have only just begun to start adding up. The closing down of the city has led to losses over Rs.5000 crore and the jewellers in the city, which operate from a are very close to the terror areas, was virtually shut down for four days. And the jewelers estimate that their losses would be to the tune of over Rs.1,200 crore due to the shut down, meaning the average business per day is Rs.300-400 crore. As such the jewelers were dealing with a situation of lower demand and this has only further compounded the losses.

But on the other hand, gold is fast emerging as the safest asset to hold during the current troubled times. Despite the terror attacks, gold prices in the local market have not been impacted. Prices have not been influenced by the attacks as the metal usually shows a downward movement only when faced with larger international crises and possible disruptions to oil supplies. It in fact rallied to a five-week high in the Mumbai bullion market last week at Rs.13,185 per 10 gm on fresh support.


Apart from emerging as the safest asset, this is the peak “marriage” season in India and naturally, demand is fulled also to a large extent due to the season. Marriages are once-in-a-lifetime events, at least for the majority of the Indians. And unless the area is under curfew or there have been losses of lives in the family, marriages are usually not postponed. And if marriages have to happen in India, there is no way buying gold could be avoided. So irrespective of the terror attacks we thus see the prices of gold peaking. No wonder the foreign companies trying to set shop here go berserk trying to understand the psyche of the local people!