With financial markets facing a turbulent time, is it a good strategy to seek refuge in gold? What are the key factors that you must keep in mind before investing in the yellow metal?
Gold ended the first half of calendar year 2022 0.6 per cent higher at 1,817 dollars per ounce. The yellow metal initially rallied as the Ukraine war unfolded and investors sought safety amid increased geopolitical uncertainty.
However, some of these early gains got trimmed as investors shifted their focus to monetary policy and higher bond yields. The impact was felt across asset classes.
In the near term, analysis believe, gold prices will react to speed at which global central banks tighten monetary policy in an effort to control inflation.
According to World Gold Council, though interest rate hikes by central banks may create headwinds for gold, many of these hawkish policy expectations are already priced in.
"Concurrently, continued inflation and geopolitical risks will likely sustain demand for gold as a hedge. Underperformance of stocks and bonds in a potential stagflationary environment may also be positive for gold,” according to the World Gold Council.
So, is this a good time to invest in gold, and what are the likely returns you can expect in the remaining part of 2022 from the yellow metal?
Let’s listen to what Ghazal Jain, associate fund manager for alternative Investment, Quantum AMC has to say.
International prices have moved in $100/oz range in H1-CY22, says Jain. Gold swayed between Rs 50,000 to Rs 55,000 per 10 grams in H1 in the Indian markets. H2 to mirror H1 price range, she says. Pandemic, geopolitical concerns can trigger price rise, she says adding that long-term investors can allocate at current levels.
 "Is it a good strategy to invest in gold right now?")
