What Makes Gold So Valuable And Why RBI Keeps It As Reserves

Gold has always been a captivating metal for Indians as it is an integral part of Indian weddings. It is also seen as a symbol of status in society and because of its ever-increasing value, it is also considered one of the best investment options. Gold and land are considered to be the safest options during a financial crunch or any kind of economic crisis. Today, we will try to figure out why gold is considered a valuable asset.

Stood the test of time

As gold is a symbol of power, royalty and wealth, it has been used by people for centuries. It has stood the test of time and is as valuable as or even more today than it was hundreds of years ago. Earlier, gold was also been used for commercial transactions meaning that it was the currency of many countries around the world.

Why is gold so valuable?

In a scenario where currencies cease to function, gold emerges as a timeless alternative that has stood the test of time. This is why countries maintain reserves of this precious metal, as it has the inherent quality to serve as currency. Gold’s wide acceptability and liquidity make it a promising medium of transaction. Its intrinsic value makes it a trusted asset to secure loans and financial transactions.

What are the other features?

You can melt gold and cast it in any form.

It is also used in making equipment like high-grade electronics, dentistry, medical, defence and aerospace equipment.

Gold is everyone’s favourite choice when it comes to making jewellery.

The gold plating in food makes it look fancy as well as royal.

Gold as RBI reserves

RBI prints notes on the minimum reserve system. It should have Rs 200 crore in this reserve only then it will be able to print new notes. But do you know that Rs 200 crore in reserve is not only cash? Rather, most of it is gold. In the reserve of Rs 200 crore, there is gold worth Rs 115 crore and the rest is foreign currency.