Sunday, 03 November 2024
Sunday, 03 November 2024
Investing in gold has always been a popular choice, especially during uncertain economic times. As interest rates fall, inflation rises, and global geopolitical tensions grow, investors expect the value of gold to remain strong, making it an appealing option.
The recent surge in gold prices is because of the Federal Reserve’s decision to cut interest rates. Lower interest rates reduce the returns on assets like bonds and savings accounts, making gold a more attractive option for investors.
Analysts expect this trend to continue for the next couple of years as the Federal Reserve may keep reducing rates.
“In India it has a deep cultural connection and hence is also a time-tested asset class. Most wealth managers recommended 10-15% allocation to Gold in customers portfolio so that the overall value of the portfolio remains stable even in troubled times. Gold prices are very volatile similar to any other asset classes but relatively it is less volatile when compared to them.” Keyur Shah, Chief Executive Officer–Precious Metals Business, Muthoot Pappachan Group told The Telegraph Online. “As a long-term investment, Gold is a safe asset class that will help preserve one’s wealth and also create wealth in the long run.”
Inflation is another key factor driving gold prices. Investors have always seen gold as a hedge against inflation, meaning they perceive its value to rise as inflation increases. Financial experts often recommend investing in gold during periods of economic uncertainty. Even though gold prices might experience short-term fluctuations, its long-term outlook remains positive.
Geopolitical tensions are also playing a role in boosting gold’s value. Conflicts in West Asia, the US presidential election, and strained relations between the US and Russia add to the uncertainty in the market.
“Gold was the single best performing asset in 2024. With gold hedging against inflation and market uncertainty, financial advisors say cautious bets such as SIPs at this high price level are better rather than making big, single investments. Economists, in turn, warn that a world economic recovery may relax the price of gold, while flare-ups in geopolitical conflicts or further inflation might push them higher,” CA Manish Mishra Co-Founder - GenZCFO, told The Telegraph Online.
According to experts, people consider gold a safe bet because it protects against unexpected risks. The demand for gold, both from individuals and central banks, continues to rise, further supporting its value.
“Several factors are likely to influence gold’s performance in the next three months. With the Federal Reserve meeting scheduled for November 7th expected to include at least one interest rate cut, gold prices may rise. Additionally, the upcoming US presidential election could introduce volatility into risk assets, further enhancing gold’s appeal as a safe investment option. In Indian rupee terms, returns have been even higher, driven by the weakening rupee. We expect upward momentum in gold prices, although temporary volatility may occur.” Abans Holdings CEO Chintan Mehta told The Telegraph Online.
