Why gold is considered a 'safe-heaven'?

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Gold is considered a safe-haven asset as throughout history it has been viewed as a store of value. A safe haven asset is supposed to provide shelter in periods of financial crisis or turmoil. Specially in India, we have always been fascinated with gold, not only because of its cultural significance, but also it provides easy money when we are facing liquidity crunch.

Gold is a good investment choice to limit losses in times of market turbulence. Gold's physical attributes attract investors during times of economic uncertainty, and so it serves a purpose in the market and society - it is a stabilizing influence. It feels safe. And that's why, now most of financial professionals believe that gold should form part of investment and savings portfolios.

Because of its properties gold has been considered a safe-haven for a long time. Following are the properties of gold :

1) Universal Acceptance: Gold is recognized all over the world and it is the world's only universally accepted form of final settlement. So you can either buy or sell it anywhere.
2) Trustworthy : It is very easy to test its purity so there is less chances of any fraud. gold is the only financial asset that requires no other obligation to be made good. So, if you hold physical gold, you have zero default risk.

3) Everlasting : If you are looking for an asset to tuck away for the rest of your life then gold is the only asset which meet that criterion. It is lasted for millennia. Gold has been passed from one generation to another, and yet its value is not decreasing.

4) Liquidity : You can sell it anywhere at any time, that to in current market price.

5) Portable : It is easier to carry and handle.


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