A few careful choices can turn gold from an emotional buy into a solid investment.
Gold recorded a fresh record high closer to $4,000 an ounce as the US government shutdown and a political crisis in France injected more uncertainty into financial markets.
Given the sharp run-up in prices, a pullback in the near term cannot be ruled out. Over the medium term, given the delicate macroeconomic situation and deteriorating geopolitical situation, we are bullish on gold
Gold tends to bottom out and rally sharply during periods of successive interest rate cuts. Exchange-traded fund demand, absent for two years due to rising real yields, higher inflation, and increased carry costs, could witness a resurgence, providing an additional boost to gold prices
The yellow metal's performance is tied closely with the US dollar's, and the latter looks like it is set to have a bad year
It is safe to say that the recent rally in gold and risk assets is on account of the anticipation that the Fed will be less aggressive going forward. However, for assets that come with a degree of price volatility, there are still downside risks of recession and financial instability after the massive withdrawal of liquidity and interest rate hikes.
A quick analysis of the key factors that led to a decline in gold prices although the physical demand and supply dynamics remain robust point to the aftermath of the financial crisis in 2008- 2009.
Policy inaction in the last three-four years has affected all balance sheets whether it is the government balance sheet, corporate or household, all have come under huge attack . The long-term India story is hurt because of the currency, the way it is moving is being questioned not only by foreigners, but also by local investors.
The gold prices have crashed and as a result investors are a worried lot. An asset class that has been shinning for long has suddenly lost its sheen. No wonder, there are mixed reactions from investors. Read this space to know if you should buy, sell or hold gold now?
There is a famous saying in the financial word, 'An asset in need is a true financial asset indeed!" Normally every individual investor builds a portfolio using a lot of financial assets but is he aware which option in the lot prevents him from drowning in times of economic crisis such as currency failure, inflation, and stock market crash?