Business Standard

Limits of the global gold rush

Gold remains important in central bank reserves, but won't significantly replace financial assets on balance sheets

gold price
Premium

Representative Picture

Rajesh Kumar
Driven by increased demand, international gold prices are at record highs, surging over 30 per cent in the past two years. Price increases have been much sharper in Indian markets. The recent price movement contradicts an important theoretical characteristic associated with gold. Since gold does not generate any cash flow, the opportunity cost of holding it is low when interest rates are low. However, gold prices have increased significantly even as global interest rates are at a multi-decade high. Officials at the US Federal Reserve are signalling that interest rates may remain higher for longer. Prices have also risen despite
Disclaimer: These are personal views of the writer. They do not necessarily reflect the opinion of www.business-standard.com or the Business Standard newspaper

What you get on BS Premium?

  • Unlock 30+ premium stories daily hand-picked by our editors, across devices on browser and app.
  • Pick your 5 favourite companies, get a daily email with all news updates on them.
  • Full access to our intuitive epaper - clip, save, share articles from any device; newspaper archives from 2006.
  • Preferential invites to Business Standard events.
  • Curated newsletters on markets, personal finance, policy & politics, start-ups, technology, and more.
VIEW ALL FAQs

Need More Information - write to us at assist@bsmail.in