For Indians, in particular, gold and silver have been a longstanding obsession. The primary reason for this is their liquidity. They can easily be converted into cash. Additionally, they serve as valuable collateral for loans. Historically, gold has played a vital role in India's economic stability. During the 1991 crisis, when India's foreign exchange reserves experienced a drastic dip, the country pledged 40 tonnes of gold to stabilise the situation. As of now, gold and silver are on a trailblazing path! These precious metals have surged to record highs in India, leaving many wondering what is fuelling the flames.
Performance of Gold, Silver and Nifty 50
It's evident that both gold and silver have outperformed the Nifty 50 index. Gold, in particular, has surged with over a 15 per cent return year-to-date (YTD), while silver has also delivered impressive returns of over 12 per cent. In contrast, the Nifty 50 has yielded returns of just over 3 per cent YTD. This trend suggests that investors may be turning to safe-haven assets like precious metals amidst market volatility, as reflected in the Nifty 50's decline.
Are the global economic jitters sparking a safe haven stampede? Or are local traditions playing a role? We will delve into the multifaceted reasons behind this rally, exploring the interplay of global uncertainty, investor sentiment, and even auspicious occasions in India. So, let us first understand the significance of this shiny surge for both seasoned investors and everyday consumers.
This story is from the 22 April, 2024 edition of Dalal Street Investment Journal.
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This story is from the 22 April, 2024 edition of Dalal Street Investment Journal.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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