What is the role of gold in the investment portfolio?

1. Gold acts as a diversifying investment as it has negative correlation to stocks and other financial instruments.

2. It is a hedge against inflation as typically the value of gold rises when the cost-of-living increases.

3. Gold is a crisis asset and retains its value through financial and geopolitical uncertainties.

4. It is a highly liquid asset class, however, it does not provide any income.

5. There are many convenient and cost-effective ways to invest in gold through mutual funds and ETFs.

(Content on this page is courtesy Centre for Investment Education and Learning (CIEL). Contributions by Girija Gadre, Arti Bhargava and Labdhi Mehta.)

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