How Liquid Are Physical Gold Assets And What Makes Them Easy To Convert To Cash Globally?

Due to price stability across marketplaces, gold is one of the most easily liquid assets in the world. Physical gold offers unparalleled flexibility in storage and transportation because it is a very portable and non-bulky asset. It has continuously increased in value throughout time, making it a dependable asset to have, particularly in times of economic hardship. Because of its inherent worth and widespread acceptance, physical gold is one of the most liquid assets in the world. It is a reliable means of trade anywhere in the globe since it cuts over national boundaries, cultural norms, and monetary systems. Gold's ability to be quickly converted into cash, whether through a local jeweller or a global gold exchange, supports its status as a dependable financial safety net. The liquidity of physical gold assets and the factors that make them simple to convert into cash internationally will be covered in this piece of writing.

How liquid are physical gold assets?

As per Sumit Sharma - Founder - Radian Finserv Private Limited, gold is one of the most convenient liquid assets in the world given price standardisation across various markets. The availability of local bullion-exchange systems across various countries further eases the selling process. Physical gold is a highly portable and non-bulky asset, offering unmatched flexibility in transport and storage. It has consistently appreciated in value over time, standing as a reliable store of wealth-especially during economic crisis. Gold's liquidity and ease of conversion to cash further enhance its appeal, making it an indispensable asset for individuals seeking stability and security in uncertain financial climates.

How does physical gold remain a cornerstone asset in any economic scenario?

Physical gold is one of the most liquid assets globally because of its universal acceptance and intrinsic value. It transcends borders, cultures, and currencies, making it a trusted medium of exchange anywhere in the world. Whether it's a local jeweler or a global gold exchange, gold can be quickly converted into cash, reinforcing its role as a reliable financial safety net.

"India holds 882 tonnes of gold reserves as of December 17, 2024, ranking among the top ten nations globally, with 510 tonnes held domestically. Gold's appeal comes from its limited supply and steady demand across sectors like jewelry, technology, and investment," said Trivesh D, COO Tradejini.

"I think what truly sets gold apart is its historical significance and the trust it commands, even in modern economies. Central banks and investors continue to hold gold as a hedge against inflation, currency devaluation, and geopolitical uncertainties. Countries like Russia and China, for instance, have increased their reserves to reduce reliance on the US dollar. With its liquidity and stability, gold remains a cornerstone asset in any economic scenario," Trivesh D added.

How gold asset is a safe haven for investment?

A favourable regulatory framework, across geographies, makes gold a lucrative asset and a reliable investment. Apart from the fact that the precious metal has high emotional value for many consumers, the asset is a safe haven for investment, especially during inflation, economic and geo-political uncertainties. Its robust liquidity stems from the standardized nature of its value, particularly when sourced from LBMA-accredited refiners.

"The key is to ensure that physical gold meets international purity standards of 99.99%, as this guarantees optimal resale value and acceptance across global markets. Therefore, its instant convertibility and acceptance as a global store of value makes physical gold an essential part of the long-term investment journey of consumers across the globe," said Mr. Vikas Singh, Managing Director & CEO at MMTC-PAMP.

What Makes Gold Easy To Convert To Cash Globally?

According to Aksha Kamboj, VP of India Bullion & Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures, worldwide Gold is considered an alternative to Fiat currency and hence central banks of all countries keep buying gold and increasing their reserve. Historically also Gold has been used as an alternative to currency and many trades were settled with Gold. However, to protect the currency value of their own, central banks keep increasing gold reserves in their respective country.

"Currency has border barriers and the currency of one country can not be used in another. However gold has a unique advantage: it bypasses the negativity of currency and can be traded beyond the country's border also. Gold is internationally traded and hence can be encashed anywhere unlike currency," said Aksha Kamboj.

Disclaimer

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