Gold a good investment option during uncertain times, high inflation

Rebalancing the portfolio by booking some profits in equity might be a good hedge for an extended bearish period.

Financial markets have entered a bearish phase due to a combination of events. The rapid surge in Omicron is now guaranteed to slow economic recovery, leading to reduced demand for energy and commodities — those markets have also corrected.

Hawkish action by the US Federal Reserve (US Fed) could also cut liquidity, which leads to less risk-taking. There are inflation fears, driven by continuing supply chain disruptions and also by the fact that there was pent-up demand during the lockdowns which is now showing up.

This is the classic situation where investors start looking at the oldest asset class —