Gold Prices At 6-Year High; Should Invest In Gold Funds, ETFs?
Gold is going to be a top stock in the new market rally. As per the expert expectation, Today it crosses all-time high. Moreover, they strongly believe that the prices may increase in the future due to the uncertainties in both the domestic and overseas markets. Is it time to take a second look at gold as an asset class, especially gold mutual funds? In fact, financial planners and investment consultants have avoided recommending gold as a diversification tool after the yellow metal lost its sheen in the last five years. Will they change their stance now that it has bounced back to a multi-year high?
The Yellow metal gold jumped 1.2% to $1,544 per ounce on Monday, 26 across the world.
Due To falling interest rates in the backdrop of falling growth and trade war, the gold price keeps going in the bull speed. Experts say that since one the gold is creating amazing spacing in the stock market irrespective of other financial assets over 3-4 years. Analysts also say that the momentum in gold prices would continue and by the end of the year, the prices may touch Rs 40,000 – 45,000/10gms.
After disclose of US-China trade war with the new tariff, the gold and silver prices raised to a new six-year high as investors rushed for safe-haven assets. The depreciating Indian rupee also helped the rise in prices. We expect the current trend to continue for gold and silver,” said Pritam Kumar Patnaik, Head Commodities, Reliance Commodities, in a note. “On the MCX, the Gold is likely to move towards 39,900 to 40,000 levels. Saying that 38,800 and 39,000 act as a strong crucial support level for gold on the downside,” Patnaik added.
Experts believe that investors should not invest in gold with hight expectations. “it Doesn’t make sense to invest in a gold fund or gold bonds or gold ETFs because gold prices have gone up. For conservative or moderate investors 5-10% allocation to gold is sufficient”, says Gaurav Monga Director, PXG consultants.
Mutual Fund advisors used to ask investors to take a modest exposure of 10% in gold for diversification. They used to recommend gold as a hedging mechanism, as it is supposed to steady the portfolio when everything else goes wrong. The yellow metal has proved it’s worth during the global crisis in 2008. However, since then it has lost its charm.