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4 reasons why you must still invest in gold

High inflation and fiscal deficit are conducive for gold prices

January 28, 2021 / 05:00 PM IST

After a stupendous run through 2018 and 2019, gold prices have been weak in the second half of the CY2020. In the last six months gold prices have declined 6.4 percent. Experts still say that gold must be an integral part of your portfolio. Here are some reasons, why you should not ignore gold.

Stimulus & inflation

In economic downturns, governments around the world typically pump in money into the financial system. It has been a time-tested weapon used by policy makers to make funds available to those who need them during desperate times. However, over a period of time, its effectiveness has come down and hence an even larger stimulus has become the order of the day. “As the economy is expected to take more time to recover, more stimulus is expected from central bankers all over the world, including in the US. This should propel gold prices upwards,” says Roopali Prabhu, Chief Investment Officer, Sanctum Wealth Management.