Gold prices in focus: Should you buy or sell? Here’s what experts say
Experts say that despite occasional fluctuations, gold’s long-term performance makes it a reliable hedge against inflation, currency risks, and geopolitical uncertainties.Experts also pointed to the key drivers of gold prices today, including global economic cues, rupee-dollar movements, domestic demand, geopolitical events, and central bank policies, including actions by the central banks of the world.Suresh Sadagopan, MD & Principal Officer at Ladder7 Wealth Planners, in an exclusive interaction with TOI emphasized that the long-term benefits of investing in gold, particularly during volatile times.
“Gold is a long term asset class and should be buyd with a long-term view.
I suggest gold buys with a ten year or more horizon.
Short term volatility can be there based on near term events but one should not be perturbed by this.
Gold itself is such an instrument which can be a good hedge to market risk, inflation, geo-political risks, wars, etc.” he told TOI.Sadagopan also pointed out that gold’s current performance is influenced more by global factors than domestic demand.
“Gold is a good long-term asset which works well in a volatile, high risk environment.
The geopolitical risk and de-dollarisation phenomenon are some of the drivers of gold investments.
Both these look like medium term trends (if not long-term ) and hence buying gold may be a good hedge in such volatile times”“We suggest at this point up to 10% in gold and silver in the 80:20 ratio,” he added.On the key drivers of gold prices, Sadagopan said, “The cues in gold prices are not so much from India.
India has traditionally been a big buyer of gold at the retail level.
In fact retail buying will be muted considering the high prices of Gold.
What is buoying up the prices are the central bank buying of gold and gold allocations into portfolios through ETFs, Gold Funds etc”Supporting the long-term view, Kshitiz Jain, CFA, FRM referenced the Lindy Effect — a principle originating from Broadway shows, where the longer a show runs, the more likely it is to continue.“Lindy’s delicatessen,” a famous restaurant in Manhattan where comedians and Broadway actors would gather.
Lindy Effect began as an observation about show business longevity: The longer a show had already been running on Broadway, the longer it was likely to continue running.
The returns in gold are a strong confirmation of the Lindy effect.
NIFTY 50 in terms of gold in INR has not generated any returns in over the last 10 years.
The same is true globally also.
Gold has been able to play its role as a store of value over the long term,” Jain said.(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own.
These opinions do not represent the views of The Times of India)
