Gold is one of the world’s oldest assets. It has been in existence since before any currency was introduced and hence, will always be trusted by governments across borders, making it a valuable and most trusted asset class. Gold is often bought as a safe store-of-value to cater to unprecedented circumstances but the form in which it is held is not always investor-friendly and ends up lowering one’s returns due to additional charges and taxes. Digital Gold solves exactly this shortcoming as it offers all the benefits of traditional gold, without the hassles of figuring out secure storage for physical gold and incurring charges while liquidating the same.
Despite the benefits of holding digital gold, many Gen X and older generations might still be wary of owning this asset due to their preference for the physical aspect of purchasing gold.
However, this is not the case for the younger millennial and Gen Z investors. The millennials form a majority of our workforce and subsequently move on to become investors as well. India’s retail investment market is witnessing a significant upsurge in volumes, fuelled by innovative Fintech and Wealth-tech applications making investing in various asset classes very quick and convenient. Wealth-tech apps have infused 21st-century technology to make a traditional asset like gold a viable investment option and a bolster against riskier assets.
From a larger perspective, the younger generation is driving and catalysing the next revolution in wealth management. The growing interest in new-age access to investment options and the wide-scale success of wealth-tech platforms is proof that there has been a paradigm shift in the industry, largely driven by millennial investors. Millennials put more importance on generating value from their wealth. These preferences have given a new life to an asset as old and reliable as gold, as wealth-tech platforms have simplified investments by integrating technologies that make gold digital, mobile, usable and convenient. These platforms allow millennials to hold gold for the long term and build wealth gradually.
Millennials are also significantly influencing the wealth management space by encouraging traditionalists. As the older generations witness the advantages digital investments offer, they’re following suit. The shift is largely from physical to digital wealth management ways, with speed, customer experience, transparency, and safety as key focus areas.
Lastly, with the many disruptions that COVID-19 brought into our lives, it also taught us certain things – one of them being the importance of having a secure nest of money to rely on when everything in the economy comes to a stand-still, preferably parked in a highly liquid, stable, and inflation-proof asset. The rally in the gold prices during the lockdown is proof of this demand for financially secure assets. As the average investor age keeps changing, so will their preferred ways of investing. Considering investments in digital gold to build long-term wealth is a smart and safe move for digital natives looking for a trusted instrument in the comfort of the familiar digital space.
There will continue to be a bullish sentiment around the future of digital gold. The essence of investing in gold as a safe haven and an auspicious asset remains the same in India, even as the ways to procure and hold it may change from generation to generation.
By Ashraf Rizvi, Founder and CEO, Gilded