Sachin Kothari, director of “Augmont – Gold For All”, believes that gold prices might remain stable or face some pressure in the next one to two months. He also predicts that the prices have full potential to touch around INR 70,000. The main reason for this is the weakening fundamentals and technical factors.
Medium to Long-Term Outlook Positive
Despite the short-term pressure, Kothari has a positive outlook for the medium to long term. He expects gold prices to reach new record highs in the last quarter of 2024. This growth will be led by upcoming uncertainties like the US election in November.
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Strong Start to 2024
Gold started 2024 with high prices around INR 63,000 per 10 grams. It saw an 18% surge between February 14, 2024 and April 12, 2024. They hit a new all-time high of around INR 74,500 per 10 grams. This rise was due to escalating Middle East tensions, a rush for gold in China, record purchases by central banks, inflation concerns and high US government debt.
Recent Stabilization
By the end of the first half of 2024, gold prices had stabilized. Some negative triggers, such as the Fed’s change from a hawkish to a dovish stance contributed to this stability. The dollar index also remained strong. These factors mainly influenced gold prices.
Investment Strategy in Gold and Silver
Kothari advises a balanced investment portfolio with 10-15% in gold and 5-10% in silver. He says that silver, like gold, is a safe-haven asset. These assets either maintain or increase the value of your portfolio during times of instability.
Ways to Invest in Gold and Silver
When you invest in gold and silver, it’s important to consider your investment horizon, risk tolerance and liquidity needs. Options include physical coins and bars, digital gold, gold futures and options, gold ETFs and gold sovereign bonds (SGBs).
Importance of Commodities in a Portfolio
Investing in commodities like gold and silver is very important for diversification and risk management. Kothari says that a well-balanced portfolio should include around 15-20% in gold and silver combined. It should be 20% in debt and 60% in equities.
Trends Among New Investors
After the COVID-19 Pandemic, online shopping preferences have boomed. The demand for gold jewelry and investments have also surged. Gen Z and younger investors prefer the convenience of digital gold. This is because it can be purchased in small fractions and stored securely.
Safety Measures for Digital Gold
It is important to choose reputable platforms with secure, when we invest in digital gold, with strong track record, positive reviews and regulatory compliance. It’s important for us to understand all the terms, conditions, fees and storage details. This ensures proper ownership documentation. Regular third-party audits of gold reserves are important to verify that they match the issued digital gold.
There should be insured vault storages for physical gold. There are various features available nowadays like comprehensive safeguards, regular independent audits, real-time tracking and easy redemption options.
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Impact of Inflation on Gold Investments
Gold is a valuable component of a diversified investment portfolio. It acts as a hedge against inflation, low interest rates and economic uncertainty. Even though the Federal Reserve’s delayed rate cuts have caused this current fall in gold prices, gold’s long-term potential remains strong.
Disclaimer
The content of this article is only for informational purposes and we do not offer any investment advice from our end. Please consult a SEBI-registered investment advisor before making any investment decision. The information does not necessarily reflect the views/opinions of the publisher.
About the Author
Mr. Radhesh Tarang Shah, is a management student at Institute of Management, Nirma University. He has a passion for writing articles and poems. He has experience as a financial analyst, author, news writer, marketer and social worker.
