Equities, which are trading at high valuations and have also been volatile lately, pose the risk of periodic sell-offs. In this environment, experts recommend diversifying portfolios. That puts the focus on gold, which can act as an effective diversifier.
Experts say investors must have an allocation to gold despite its current price level of around $2,000 per ounce in the international market and above Rs 61,000 per 10 grams in the Indian market.
Gold the stabiliser
When equities tank, gold generally remains steady and protects the downside. “Gold has a very low correlation with equity. It makes sense to have