GOLD HAS BEEN on a tear since the beginning of 2024. On March 21, it touched an all-time high of ₹66,943 ($2,224.80) per 10 gm. Considering this, investors may be forgiven for thinking that it’s time to go big on gold. Why not make the most of this rally? But there lies the rub. The recent surge in prices to all-time highs has come despite an increase in uncertainty about the trajectory of the yellow metal, which has left many market veterans puzzled.
Gold is a traditional hedge at times of high inflation or economic uncertainty—global and domestic. And though there is continued economic uncertainty in light of the Israel-Hamas war, the worst of the inflationary surge of 2021 and 2022 seems well and truly to have passed. Besides, it is also a time when central banks across the globe have raised interest rates, especially in the US, to levels not seen since after the oil crisis of the 1970s. Often in the past, increased interest rates have dampened gold demand by offering a relatively stable investment option like the US Treasury bond, in particular, that promise steady returns with minimal risk.
The paradox of the current gold run becomes clearer when it is compared with cryptocurrencies. They, too, have seen a sharp rise in prices, especially Bitcoin, the largest of the crypto assets. In this case, though, the trigger seems to be the US Securities Exchange Commission’s decision to allow exchange-traded funds (ETFs) in this space. But, as mentioned earlier, that’s not the case with gold, where the increase in price has coincided with an outflow from ETFs.
How then should investors approach this commodity? Is it prudent to invest in an instrument that has been so unpredictable recently? And are there factors that could boost prices further?
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber ? Sign In
This story is from the {{IssueName}} edition of {{MagazineName}}.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
Already a subscriber? Sign In
Look Before You Leap
In 2025, Investors Will Need To Factor In Volatility Across Asset Classes
"Focus on the challenge of each customer"
SHASHANK KUMAR MD & CO-FOUNDER I RAZORPAY Razorpay is India's first full-stack financial solutions company
PEDAL ON THE FUTURE
THE MG WINDSOR EV, WITH ITS FUTURISTIC AND MINIMALIST DESIGN, COMBINES THE BEST OF BOTH WORLDS-COMFORT AND TECHNOLOGY
BREATHE EASY
Whether you're battling allergies, looking to remove pollutants, or simply want to breathe easier, the right air purifier can make a difference
The Taste of India in a Glass
FROM ROYAL LIQUEURS TO DISTILLED MAHUA, INDIAN HERITAGE ALCOHOLIC BEVERAGES ARE HAVING THEIR DAY IN THE SUN
MISSING ADVISORS
INDIA HAS JUST ONE INVESTMENT ADVISOR FOR NEARLY EVERY 200,000 INVESTORS. AT A TIME WHEN RETAIL PARTICIPATION IN THE STOCK MARKETS IS BOOMING, THIS ASSUMES SIGNIFICANCE
TURNING A CORNER
SHARED ELECTRIC MOBILITY START-UP YULU'S SHIFT TO SERVICING THE QUICK COMMERCE SECTOR IS HELPING IT GROW FAST. IT IS NOW FOCUSSING ON IMPROVING ROAD SAFETY FEATURES AS IT TURNS EBITDA POSITIVE
REALITY CHECK
INDIAN STOCK MARKETS PLUNGED BEGINNING OCTOBER FOR A HOST OF REASONS, INCLUDING A FALL IN FII OWNERSHIP. HOW DEEP WILL THE CORRECTION BE?
TRUMP'S TRADE TANGO
The return of Donald Trump as the 47th President of the US has put the global economy on edge. India, too, is unlikely to remain unaffected. How will policymakers meet this latest challenge?
"The essence of the Trump administration will be transactional”
Global investor, analyst, and best-selling author Ruchir Sharma decodes why Donald Trump won the elections, what India should do, the risks, and more
