Sheen Intact: Gold Still A Good Investment Bet

For small investors in India, sovereign gold bonds is the best choice.

- Yagnesh Kansara

Increasing power struggle between the US and China has heightened geo-political tensions among the powerful countries. These mighty nations trying to prove their supremacy over others has been the root cause for market volatility across the board. And, the fear factor has once again brought to fore the flavour of safe haven for investors as far as gold is concerned. Back home, things are also far from promising. Uncertainty has gripped Indian markets and the volatility will continue to prevail till the ensuing general elections.

These trends will have an immediate impact on gold, globally and locally, and prices will firm up in the near to medium range.

Dinesh D Parekh, Mumbai based bullion expert, feels the firm trend in bullion will continue in 2019 and for some more time after that. “First, the continuance of this trend is because of the recent US government shut down and its impact on the US currency, which has weakened. This has helped in firming up the gold prices in the international markets. Second is the US-China trade war. Third, gold prices are to remain strong because of the sustained demand from India and China,” he added.

Bhargav Vaidya, Chartered Accountant, and Hedging Advisor, Mumbai’s gem, jewellery and diamond sector, said, “We are dependent on rupee-dollar exchange rates as far as the price of gold is concerned. With weak rupee and strong dollar, gold prices go up. There is an inverse relationship between rupee and gold prices.” He further added, “I see international gold price in the range of $1,250 over the next four to six months while over a period of the next four to six quarters, I feel, it will move in the range of $1,361 (high) and $1,221 (low).”