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Last Updated : Jun 27, 2019 09:56 AM IST | Source: Moneycontrol.com

Gold surges 12% in a month, hits 6-year high; what should investors do?

Gold rallied from $1,277.1 an ounce to $1,427.9 on June 25 in a month. In India, 24-carat gold price increased from Rs 31,900 per 10 gm to Rs 34,650 in a month

Sunil Shankar Matkar

Gold prices hit their highest levels in last six years by surpassing $1,400 an ounce last week. The metal has gained nearly 12 percent in a month time.

The recent rally in gold is a result of uncertainty in the global markets with the escalation of US-China trade war, geo-political tensions between US and Iran, and the dovish tone of the US central bank with regards to the possibility of the rate cut in the next meeting.

In fact, the yellow metal outpaced other key commodities as well as equities in terms of gains.

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Gold rallied from $1,277.1 an ounce to $1,427.9 on June 25 in a month. In India, 24-carat gold price increased from Rs 31,900 per 10 gm to Rs 34,650 in a month.

After such a stupendous rally, is it the right idea to book profits or stay invested in gold?

Experts said gold is a proper hedging tool, so one can stay invested in a near as well as long term but if someone wants to book profits then he/she can go for partial offloading.

"Though almost a 13 percent rise in less than a month is very sharp, it is better to stay put with your gold investments as gold remains a perfect hedge for investors who have exposure to risky assets like equities," Shailendra Kumar, Chief Investment Officer at Narnolia Financial Advisors said.

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Investors should always have a very prudent asset allocation for various asset class like real estate, gold, fixed income and equities, he advised.

Abhishek Bansal, Chairman of ABans Group of Companies also advised investors to remain invested in gold as long as geopolitical issues continue to support.

"We can see a 4-5 percent rally from current levels as well. However, keep a close eye on US-China trade talks at the G-20 summit before going for profit booking," he said.

"We would also be keenly watching the G-20 Summit, wherein US and China are meeting to discuss tariff issues and if they were to reach any sort of agreement, it would be negative for gold prices," he added.

Jigar Trivedi, Research Analyst- Commodities Fundamental at Anand Rathi Shares & Stock Brokers also recommended staying long in the yellow metal.

However, Prathamesh Mallya, Chief Analyst - Non-Agri Commodities and Currencies at Angel Broking feels gold could fall to $1,340 in the near term.

Hence, he advised one should divest at least 10 percent of their portfolio in gold after the current rally.

Disclaimer: The views and investment tips expressed by investment experts on moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
First Published on Jun 26, 2019 03:16 pm
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