{"id":3530,"date":"2019-09-23T07:04:18","date_gmt":"2019-09-23T07:04:18","guid":{"rendered":"https:\/\/kuvera.in\/blog\/?p=3530"},"modified":"2024-10-04T13:48:05","modified_gmt":"2024-10-04T08:18:05","slug":"digital-gold-for-smart-investors","status":"publish","type":"post","link":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/","title":{"rendered":"Digital gold for smart investors"},"content":{"rendered":"<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_40 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" area-label=\"ez-toc-toggle-icon-1\"><label for=\"item-69d09dfde96c4\" aria-label=\"Table of Content\"><span style=\"display: flex;align-items: center;width: 35px;height: 30px;justify-content: center;direction:ltr;\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/label><input  type=\"checkbox\" id=\"item-69d09dfde96c4\"><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Factors_that_affect_the_gold_price\" title=\"Factors that affect the gold price\">Factors that affect the gold price<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Enter_digital_gold\" title=\"Enter digital gold\">Enter digital gold<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#How_digital_gold_works\" title=\"How digital gold works?\">How digital gold works?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#How_to_buy_digital_gold_on_Kuvera\" title=\"How to buy digital gold on Kuvera?\">How to buy digital gold on Kuvera?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Why_invest_in_digital_gold_over_physical_gold\" title=\"Why invest in digital gold (over physical gold)?\">Why invest in digital gold (over physical gold)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Why_invest_in_digital_gold_over_Gold_ETF_and_Gold_Mutual_Funds\" title=\"Why invest in digital gold (over Gold ETF and Gold Mutual Funds)?\">Why invest in digital gold (over Gold ETF and Gold Mutual Funds)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Why_invest_in_digital_gold_along_with_equity_MFs\" title=\"Why invest in digital gold (along with equity MFs)?\">Why invest in digital gold (along with equity MFs)?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#Key_Takeaways\" title=\"Key Takeaways\">Key Takeaways<\/a><\/li><\/ul><\/nav><\/div>\n<p><img loading=\"lazy\" class=\"wp-image-3560 alignleft\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-5.png\" alt=\"\" width=\"31\" height=\"144\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-5.png 92w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-5-65x300.png 65w\" sizes=\"(max-width: 31px) 100vw, 31px\" \/><a href=\"https:\/\/en.wikipedia.org\/wiki\/Gold\" target=\"_blank\" rel=\"noopener noreferrer\">Gold<\/a> is a precious and highly liquid instrument that has the attributes of both commodity and currency. It has been used throughout history as money and has been a most popular metal for investment purpose, storage of wealth and as a source of high-quality collateral.<\/p>\n<p>Gold has social and cultural significance. For us, gold means wealth and prosperity. Celebrations like weddings, <a href=\"https:\/\/en.wikipedia.org\/wiki\/Diwali\" target=\"_blank\" rel=\"noopener noreferrer\">Diwali<\/a> and <a href=\"https:\/\/en.wikipedia.org\/wiki\/Dhanteras\" target=\"_blank\" rel=\"noopener noreferrer\">Dhanteras<\/a> are considered to be incomplete without it.<\/p>\n<p>No wonder we, as Indians, account for almost one-fourth of all consumption of gold globally. Yes, really!<\/p>\n<p>We love the yellow metal \ud83d\ude42<\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p><strong><em>The desire for gold is the most universal and deeply rooted commercial instinct of the human race.\u00a0\u00a0\u00a0\u00a0\u00a0<\/em><\/strong><\/p>\n<p class=\"author\"><strong><em>: Gerald M. Loeb<\/em><\/strong><\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-full wp-image-3562\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldDemandIndia.png\" alt=\"\" width=\"941\" height=\"433\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldDemandIndia.png 941w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldDemandIndia-300x138.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldDemandIndia-768x353.png 768w\" sizes=\"(max-width: 941px) 100vw, 941px\" \/><\/p>\n<p>While gold has ornamental and cultural significance for us, its investment properties are also equally good. Gold, as some form of currency or store of value, has been in circulation for centuries. As a long term store of value, it is an effective hedge against inflation while also exhibiting strong downside protection properties one would expect from an effective portfolio hedge.<\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p><em><strong>Gold and silver are money. Everything else is credit. <\/strong><\/em><\/p>\n<p><em><strong>: J.P. Morgan<\/strong><\/em><\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Factors_that_affect_the_gold_price\"><\/span><strong>Factors that affect the gold price<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The gold price is affected by market supply and demand along with speculation. Gold price also relates to the USD exchange rate, oil and other commodities prices, economic instabilities and financial crises, and other world events such as wars, natural hazards and disasters. <a href=\"https:\/\/econpapers.repec.org\/article\/fipfedrer\/y_3a1980_3ai_3amar_3ap_3a3-13_3an_3av.66no.2.htm\" target=\"_blank\" rel=\"noopener noreferrer\">Abken (1980)<\/a> and <a href=\"http:\/\/www.sciepub.com\/reference\/35708\" target=\"_blank\" rel=\"noopener noreferrer\">Salant &amp; Henderson (1978)<\/a> found inflation, gold demand and supply, world events, and gold auction as the determinant of gold price. More recently <a href=\"https:\/\/www.researchgate.net\/publication\/4931408_A_power_GARCH_examination_of_the_gold_market\" target=\"_blank\" rel=\"noopener noreferrer\">Tully and Lucey (2007)<\/a> found that the US dollar is the main macroeconomic variable that affects gold returns. So, for Indian investors, <strong><a href=\"https:\/\/kuvera.in\/portfolio\/\">investing in gold<\/a> along with it being a macroeconomic hedge to crash in stock prices is also a currency hedge against rupee devaluation.<\/strong><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Enter_digital_gold\"><\/span><strong>Enter digital gold<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><span lang=\"EN-IN\" style=\"color: #1c1e29;\">Digital gold is an investment option where you can buy 24K 99.9% pure gold online in denominations as low as Rs 100.\u00a0 <\/span>It is a simple, straightforward and transparent way to buy and sell gold online.<\/p>\n<p>Think of it as physical gold, except that you don&#8217;t have to worry about purity, making charges, safe storage or ease of selling.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"How_digital_gold_works\"><\/span><strong>How digital gold works?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>The amount of digital gold you purchase online is backed by 24 K 99.9% pure gold which is placed in a secured vault. To buy, you place a <a href=\"https:\/\/kuvera.in\/portfolio\/\" target=\"_blank\" rel=\"noopener noreferrer\">buy order on Kuvera<\/a> and we, with the help of our partners Augmont Gold, buy the gold at market price and keep it in a secure vault for you.\u00a0 Similarly, when you sell, we sell some of your gold at the then market price and deposit the cash into your bank account. Completely digital and completely secure.<\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"How_to_buy_digital_gold_on_Kuvera\"><\/span><strong>How to <a href=\"https:\/\/kuvera.in\/portfolio\/\">buy digital gold<\/a> on Kuvera?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>It couldn&#8217;t be easier. Enter the amount or the gms you want to buy and pay by UPI, netbanking or card. Simple as that!<\/p>\n<p><iframe loading=\"lazy\" title=\"Buy gold on Kuvera\" width=\"640\" height=\"360\" src=\"https:\/\/www.youtube.com\/embed\/cy7qwxeYmLo?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Why_invest_in_digital_gold_over_physical_gold\"><\/span><strong>Why <a href=\"https:\/\/kuvera.in\/portfolio\/\">invest in digital gold<\/a> (over physical gold)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p><strong>1\/<\/strong> <strong>Purity<\/strong> Certified 24K 99.9% pure gold. As good as it gets.<\/p>\n<p><strong>2\/ Security<\/strong> &#8211; Stored in vaults by BRINKS, the global leader in asset security.\u00a0 No theft issues, no bank lockers, nada.<\/p>\n<p><strong>3\/ Access<\/strong> &#8211; Sell it online at the prevailing gold price for immediate cash or request for home delivery. Your gold, your way.<\/p>\n<p><strong>4\/ Quantity\u00a0<\/strong>&#8211; Pay only for gold. No making charges, cuts or commissions. Get more gold.<\/p>\n<p>Buy it when you want to invest in gold and sell it when you need money &#8211; all from the comfort of <a href=\"https:\/\/kuvera.in\/portfolio\/\"><strong>our app<\/strong><\/a>. Digital gold, thus, overcomes some of the traditional challenges of investing in gold.<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter wp-image-3575 size-full\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-6.png\" alt=\"\" width=\"1249\" height=\"752\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-6.png 1249w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-6-300x181.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-6-768x462.png 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Capture-6-1024x617.png 1024w\" sizes=\"(max-width: 1249px) 100vw, 1249px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Why_invest_in_digital_gold_over_Gold_ETF_and_Gold_Mutual_Funds\"><\/span><strong>Why <a href=\"https:\/\/kuvera.in\/portfolio\/\">invest in digital gold<\/a> (over Gold ETF and Gold Mutual Funds)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>It is a known fact that Gold ETFs and Gold Mutual Funds do not track the price of physical gold closely. The culprit is fund expenses.<\/p>\n<p>The NAV for Gold ETF or Mutual Funds is computed after deducting the fee of the asset management company plus storage and custodian charges, which can all add up. Over time this can create a significant mismatch in gold returns and that of the gold ETF or Mutual Fund.<\/p>\n<p>In the chart below, we look at 5-year returns from one Gold ETF (ICICI) and one Gold MF (Reliance).<\/p>\n<p><strong>The ETF gained 34.83% while the MF gained 33.01%. Between the same time (19 Sep 2014 to 6 Sep 2019), the price of 22K gold went up by 51.3% <\/strong>(from Rs 2,525 \/ gm to Rs 3,820 \/ gm).<\/p>\n<p><strong>That&#8217;s a big performance drag for using ETF and MF for investing in gold.<\/strong><\/p>\n<p><img loading=\"lazy\" class=\"aligncenter wp-image-3568 size-full\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldETFMF.png\" alt=\"\" width=\"779\" height=\"505\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldETFMF.png 779w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldETFMF-300x194.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldETFMF-768x498.png 768w\" sizes=\"(max-width: 779px) 100vw, 779px\" \/><\/p>\n<p>&nbsp;<\/p>\n<h4><span class=\"ez-toc-section\" id=\"Why_invest_in_digital_gold_along_with_equity_MFs\"><\/span><strong>Why <a href=\"https:\/\/kuvera.in\/portfolio\/\">invest in digital gold<\/a> (along with equity MFs)?<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>Going back to 1990 and looking at monthly data we can see that <a href=\"https:\/\/kuvera.in\/explore\/reliance-index-nifty-growth--NFAG-GR\" target=\"_blank\" rel=\"noopener noreferrer\">Nifty50<\/a> returned higher on average, but with higher standard deviation or risk. Risk-adjusted returns are still marginally better for gold but not by much.<\/p>\n<p>Gold also has a better max drawdown (a measure of maximum loss possible) of -25% (vs -55% for the Nifty 50). That is an investor in Nifty50 would have faced a maximum peak to trough decline in the portfolio value of -55%. In the same time, an investor in Gold would have a faced a maximum peak to trough decline of -25%.<\/p>\n<p>&nbsp;<\/p>\n<table style=\"height: 146px;\" width=\"623\">\n<tbody>\n<tr>\n<td style=\"text-align: left;\" width=\"189\"><strong>1990 Onwards Monthly<\/strong><\/td>\n<td style=\"text-align: left;\" width=\"97\"><strong>Gold<\/strong><\/td>\n<td style=\"text-align: left;\" width=\"117\"><strong>Nifty50<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Return<\/td>\n<td>10.7%<\/td>\n<td>15.6%<\/td>\n<\/tr>\n<tr>\n<td>StdDev<\/td>\n<td>15.9%<\/td>\n<td>27.2%<\/td>\n<\/tr>\n<tr>\n<td>Return \/ StdDev<\/td>\n<td>0.67<\/td>\n<td>0.57<\/td>\n<\/tr>\n<tr>\n<td style=\"text-align: left;\">Max DrawDown<\/td>\n<td style=\"text-align: left;\">-25%<\/td>\n<td style=\"text-align: left;\">-55%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p>What gold loses in return expectation it more than makes up for in correlation and thus diversification benefits. Gold, you see, is a team player. And at times when Nifty 50 is not performing due to crash fears, wars, natural hazards or disasters, gold does well.<\/p>\n<p>It helps you tide over the bad times much better. Or you could say, when the going gets tough, gold gets going.<\/p>\n<p><strong>In the past 29 years of data, the correlation of monthly gold returns and monthly Nifty50 returns is just 0.3%!\u00a0<\/strong><\/p>\n<p style=\"margin: 0in 0in .0001pt -7.1pt;\"><span lang=\"EN-IN\" style=\"color: #1c1e29;\">Of the 348 monthly returns in our sample, there are 178 instances where the returns on gold and returns on Nifty 50 have opposite signs. <strong>That is if gold posted positive returns, Nifty 50 posted negative returns and vice versa.<\/strong> This is exactly what diversification is about &#8211; two assets, each with positive expected returns but no correlation in returns.<\/span><\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter wp-image-3604\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/goldNiftyOpp.png\" alt=\"\" width=\"854\" height=\"340\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/goldNiftyOpp.png 1183w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/goldNiftyOpp-300x119.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/goldNiftyOpp-768x306.png 768w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/goldNiftyOpp-1024x408.png 1024w\" sizes=\"(max-width: 854px) 100vw, 854px\" \/><\/p>\n<p>So, what does that mean at a portfolio level? <strong>Well, let&#8217;s look at a portfolio that is 50% gold and 50% nifty 50 at all times<\/strong> &#8211;<\/p>\n<p>&nbsp;<\/p>\n<table style=\"height: 174px;\" width=\"656\">\n<tbody>\n<tr>\n<td width=\"189\"><strong>From 1990 Monthly<\/strong><\/td>\n<td width=\"97\"><strong>Gold<\/strong><\/td>\n<td width=\"117\"><strong>Nifty50<\/strong><\/td>\n<td width=\"184\"><strong>50% Gold &#8211; 50% Nifty 50<\/strong><\/td>\n<\/tr>\n<tr>\n<td>Return<\/td>\n<td>10.7%<\/td>\n<td>15.6%<\/td>\n<td>13.1%<\/td>\n<\/tr>\n<tr>\n<td>StdDev<\/td>\n<td>15.9%<\/td>\n<td>27.2%<\/td>\n<td>15.8%<\/td>\n<\/tr>\n<tr>\n<td>Return \/ StdDev<\/td>\n<td>0.67<\/td>\n<td>0.57<\/td>\n<td>0.83<\/td>\n<\/tr>\n<tr>\n<td>Max DrawDown<\/td>\n<td>-25%<\/td>\n<td>-55%<\/td>\n<td>-27%<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p>&nbsp;<\/p>\n<p><strong>The combined portfolio has highly superior risk-adjusted returns.<\/strong> And the drawdown number is as close as gold&#8217;s alone. Lawrence (2003) also concludes that the low correlation between gold and stock returns makes gold an efficient portfolio diversifier.<\/p>\n<p>&nbsp;<\/p>\n<p>Let&#8217;s look at two such episodes in the past in a lot more details. The bursting of the dot com bubble of 2000 &#8211; 2002 and the great financial crisis of 2008-2009.<\/p>\n<p><strong>The dot com burst of 2000 &#8211; 2002: <\/strong>The <a href=\"https:\/\/en.wikipedia.org\/wiki\/Dot-com_bubble\" target=\"_blank\" rel=\"noopener noreferrer\">dot com bubble<\/a> burst in early 2000 bringing an end to excesses in dot com funding and valuations in the US. Even though the bubble was mostly localized to NASDAQ the bursting of the bubble had consequences for Indian markets too. Between 2000 to 2002 Nifty50 proceeded to fall 40%. As a flight to safety and crash hedge, Gold had outsized gains of ~30% during the same time period.<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-full wp-image-3644\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldTechCrisis.png\" alt=\"\" width=\"1004\" height=\"529\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldTechCrisis.png 1004w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldTechCrisis-300x158.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldTechCrisis-768x405.png 768w\" sizes=\"(max-width: 1004px) 100vw, 1004px\" \/><\/p>\n<p>&nbsp;<\/p>\n<p><strong>The Global Financial Crisis of 2008: <\/strong>As per <a href=\"https:\/\/en.wikipedia.org\/wiki\/Financial_crisis_of_2007%E2%80%932008\" target=\"_blank\" rel=\"noopener noreferrer\">Wikipedia<\/a>, &#8220;<em>the\u00a0<b>2008 financial crisis<\/b>, was a severe worldwide\u00a0<a class=\"mw-redirect\" title=\"Economic crisis\" href=\"https:\/\/en.wikipedia.org\/wiki\/Economic_crisis\">economic crisis<\/a>\u00a0considered by many economists to have been the most serious\u00a0<a title=\"Financial crisis\" href=\"https:\/\/en.wikipedia.org\/wiki\/Financial_crisis\">financial crisis<\/a>\u00a0since the\u00a0<a title=\"Great Depression\" href=\"https:\/\/en.wikipedia.org\/wiki\/Great_Depression\">Great Depression<\/a> of the 1930s, to which it is often compared.<\/em>&#8221; The crisis had a severe impact on global financial markets and Nifty50 saw a monthly drawdown of ~50% during that time. Gold again shone as the crisis hedge and rallied ~30% to protect from some of the impacts of the stock market meltdown.<\/p>\n<p>&nbsp;<\/p>\n<p><img loading=\"lazy\" class=\"aligncenter size-full wp-image-3646\" src=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldGFC.png\" alt=\"\" width=\"1003\" height=\"518\" srcset=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldGFC.png 1003w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldGFC-300x155.png 300w, https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/GoldGFC-768x397.png 768w\" sizes=\"(max-width: 1003px) 100vw, 1003px\" \/><\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p><em><strong>Just based on the correlation data, it is clear that investors should take gold seriously and have exposure to it as a macro-economic hedge, as a currency hedge and a saviour in bad times. <\/strong><\/em><\/p>\n<p><em><strong>That it also returned ~11% during the past 29 years is just icing on the cake.\u00a0<\/strong><\/em><\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<h4><\/h4>\n<h4><span class=\"ez-toc-section\" id=\"Key_Takeaways\"><\/span><strong>Key Takeaways<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h4>\n<p>1\/ Gold has properties of both a commodity and a currency. Gold is unique among commodities due to\u00a0gold\u2019s traditional role as a safe-haven and store of value.<\/p>\n<p>2\/ Gold returns have a low correlation to equity returns especially during wars, market crashes, and disasters. This makes gold an effective portfolio diversifier.<\/p>\n<p>3\/ Digital Gold solves the issues of owning and safekeeping digital gold.<\/p>\n<p>&nbsp;<\/p>\n<blockquote><p>&nbsp;<\/p>\n<p><em><strong>The desire of gold is not for gold. It is for the means of freedom and benefit. <\/strong><\/em><\/p>\n<p><em><strong>:Ralph Waldo Emerson<\/strong><\/em><\/p>\n<p>&nbsp;<\/p><\/blockquote>\n<p>&nbsp;<\/p>\n<p>Start investing through a platform that brings goal planning and investing to your fingertips. Visit\u00a0<a href=\"https:\/\/www.kuvera.in\/\"><strong>kuvera.in<\/strong><\/a>\u00a0to discover\u00a0<a href=\"https:\/\/kuvera.in\/blog\/direct-plans-better\/\"><strong>Direct Plans<\/strong><\/a> and Digital Gold and <a href=\"https:\/\/kuvera.in\/user\/login\"><strong>start investing today.<\/strong><\/a><\/p>\n<p>#MutualFundSahiHai, #KuveraSabseSahiHai!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Gold is a precious and highly liquid instrument that has the attributes of both commodity and currency. It has been used throughout history as money and has been a most popular metal for investment purpose, storage of wealth and as a source of high-quality collateral. Gold has social and cultural significance. For us, gold means [&#8230;]<\/p>\n<p><a class=\"btn btn-secondary understrap-read-more-link\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/\">Read More&#8230;<\/a><\/p>\n","protected":false},"author":2,"featured_media":33185,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mi_skip_tracking":false},"categories":[158],"tags":[7,276,214,275],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Digital gold for smart investors - Kuvera Buy digital gold on Kuvera<\/title>\n<meta name=\"description\" content=\"What is digital gold worth in your portfolio? Does it provide good returns or good diversifcation? What is the best way to buy gold? Read on and find out.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Digital gold for smart investors - Kuvera Buy digital gold on Kuvera\" \/>\n<meta property=\"og:description\" content=\"What is digital gold worth in your portfolio? Does it provide good returns or good diversifcation? What is the best way to buy gold? Read on and find out.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/\" \/>\n<meta property=\"og:site_name\" content=\"Kuvera\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/kuvera.in\" \/>\n<meta property=\"article:published_time\" content=\"2019-09-23T07:04:18+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-10-04T08:18:05+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Blog-banner-header-image-18.png\" \/>\n\t<meta property=\"og:image:width\" content=\"2240\" \/>\n\t<meta property=\"og:image:height\" content=\"1260\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"author\" content=\"Gaurav Rastogi\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:site\" content=\"@Kuvera_In\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Gaurav Rastogi\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"8 minutes\" \/>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Digital gold for smart investors - Kuvera Buy digital gold on Kuvera","description":"What is digital gold worth in your portfolio? Does it provide good returns or good diversifcation? What is the best way to buy gold? Read on and find out.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/","og_locale":"en_US","og_type":"article","og_title":"Digital gold for smart investors - Kuvera Buy digital gold on Kuvera","og_description":"What is digital gold worth in your portfolio? Does it provide good returns or good diversifcation? What is the best way to buy gold? Read on and find out.","og_url":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/","og_site_name":"Kuvera","article_publisher":"https:\/\/www.facebook.com\/kuvera.in","article_published_time":"2019-09-23T07:04:18+00:00","article_modified_time":"2024-10-04T08:18:05+00:00","og_image":[{"width":2240,"height":1260,"url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/09\/Blog-banner-header-image-18.png","type":"image\/png"}],"author":"Gaurav Rastogi","twitter_card":"summary_large_image","twitter_creator":"@Kuvera_In","twitter_site":"@Kuvera_In","twitter_misc":{"Written by":"Gaurav Rastogi","Est. reading time":"8 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#article","isPartOf":{"@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/"},"author":{"name":"Gaurav Rastogi","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/90a520bbda6e474788752100f61385bd"},"headline":"Digital gold for smart investors","datePublished":"2019-09-23T07:04:18+00:00","dateModified":"2024-10-04T08:18:05+00:00","mainEntityOfPage":{"@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/"},"wordCount":1463,"commentCount":159,"publisher":{"@id":"https:\/\/kuvera.in\/blog\/#organization"},"keywords":["Diversification","global financial crisis","Gold","tech bubble"],"articleSection":["Kuvera Feature"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/","url":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/","name":"Digital gold for smart investors - Kuvera Buy digital gold on Kuvera","isPartOf":{"@id":"https:\/\/kuvera.in\/blog\/#website"},"datePublished":"2019-09-23T07:04:18+00:00","dateModified":"2024-10-04T08:18:05+00:00","description":"What is digital gold worth in your portfolio? Does it provide good returns or good diversifcation? What is the best way to buy gold? Read on and find out.","breadcrumb":{"@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/kuvera.in\/blog\/digital-gold-for-smart-investors\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/kuvera.in\/blog\/"},{"@type":"ListItem","position":2,"name":"Digital gold for smart investors"}]},{"@type":"WebSite","@id":"https:\/\/kuvera.in\/blog\/#website","url":"https:\/\/kuvera.in\/blog\/","name":"Kuvera","description":"Wealth Management, Simplified","publisher":{"@id":"https:\/\/kuvera.in\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/kuvera.in\/blog\/?s={search_term_string}"},"query-input":"required name=search_term_string"}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/kuvera.in\/blog\/#organization","name":"Kuvera","url":"https:\/\/kuvera.in\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/cropped-cropped-kuvera-logo-dark-3.png","contentUrl":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2022\/07\/cropped-cropped-kuvera-logo-dark-3.png","width":83,"height":13,"caption":"Kuvera"},"image":{"@id":"https:\/\/kuvera.in\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/kuvera.in","https:\/\/twitter.com\/Kuvera_In","https:\/\/www.instagram.com\/kuvera.in","https:\/\/www.linkedin.com\/company-beta\/10456535\/"]},{"@type":"Person","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/90a520bbda6e474788752100f61385bd","name":"Gaurav Rastogi","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/kuvera.in\/blog\/#\/schema\/person\/image\/","url":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/07\/GR-150x150.jpg","contentUrl":"https:\/\/kuvera.in\/blog\/wp-content\/uploads\/2019\/07\/GR-150x150.jpg","caption":"Gaurav Rastogi"},"description":"Gaurav is the CEO of Kuvera. A graduate of IITD and Chicago Booth, he managed a long-short equity strategy for Morgan Stanley before starting Kuvera.","url":"https:\/\/kuvera.in\/blog\/author\/rustyhk123\/"}]}},"amp_enabled":true,"_links":{"self":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/3530"}],"collection":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/comments?post=3530"}],"version-history":[{"count":46,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/3530\/revisions"}],"predecessor-version":[{"id":4073,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/posts\/3530\/revisions\/4073"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/media\/33185"}],"wp:attachment":[{"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/media?parent=3530"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/categories?post=3530"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kuvera.in\/blog\/wp-json\/wp\/v2\/tags?post=3530"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}