Why do we want to invest our money in gold and silver, not in real estates and other stuff? There are two reasons to invest money in gold and silver.
The prices of gold and silver may increase anytime and others may not increase in fact, there is a chance that their rates may decrease. you may think that there is a chance of decrease in the price of silver and gold too, but it has an alternative solution as it can be used as an ornament or to gift someone. Other investment options like land price, once decreased incur a major loss, you can't construct a building at that place as you are already in loss of buying that land. Even if you construct a building you will make sure the price is high when the time comes to sell it and there you may come across no one to buy it eventually leading to a loss. When it comes to gold and silver it is never a loss for people to invest in it, even if the price fluctuates. In countries like India, it is traditional to gift gold on certain occasions like marriage, sari function etc.
Why only Gold and Silver, not any other metal?
Now comes the question why you must invest only in gold and silver, not in any other metals. We don't choose other metals for investment because the other metals are not of much use in everyone life, whereas gold and silver can be of value to everybody. This is one reason for the probability of an increase of price in gold and silver.
Relation between gold, silver and bank
Gold and silver have a good relationship with banks. You may come across things like gold loans that are beneficial for you. While taking a gold loan you don't have to sell your metals in order to get the money, you can just deposit in the banks and can get money for that. Once you are capable of paying it off you can get back your metals by paying the little extra amount.
Why are banks interested in gold and silver?
My question is why they won't be when they are getting only profits from gold. There is a survey saying that the gold rates are much related to the interest price so when gold rates increase then automatically there is an increase in the interest rates. Banks incur huge profits from the gold loans, as they get interest amount from people. In the case of failure to repay the loan amount, the bank can sell the metals when there is an increase in rates; in either way the banks get profits.
Now after so many questions one more question will pop up in your mind. Is it safe to invest? That cannot be predictable but it is safe than other investments for sure. Everything has its own pros and cons but before investing make sure you are investing at right time.
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