Gold Funds have given 3.02% returns in 3 months which is a huge improvement from the negative returns posted by the category in the last one year. Experts believe that this is a sign of change in the system.
“Gold being a non-yielding asset always reacts first to any change in interest rate and hence even now with so much panic in the market and tightening of policy, the metal prices have pushed their backs to lower rates. Basis is maintained. Inflation is on the rise and has crossed the comfort zone of most central banks, interestingly supporting the overall safe-haven appeal of gold,” said analysts at Motilal Oswal Financial Services.
Gold demand in India has jumped sharply in 2020 from the lows seen during the pandemic. gold etf Inflow has increased from Rs 23 crore in August to Rs 445.69 crore in September. According to data from Motilal Oswal Financial Services, 2019 and 2020 saw an increase in gold prices, which was around 52% and 25% respectively.
However, the prices are trading between Rs 47,000 and Rs 49,000 in 2021. Recent data from the World Gold Council shows that gold demand for the quarter ended September ’21 grew by 47% to 139.1 tonnes, as against 94.6 tonnes a year ago.
According to experts, rising uncertainty about China’s Evergrande, power shortage issues, US-China trade talks, rising cases of Covid-19 and delta variant, rising debt and a host of tailwinds among a few others fuel the optimism of gold. can maintain. high bull. At the next Fed meeting, expectations are rising for the tapering off of the massive bond buying program launched by the Fed. Although the market is well prepared for this, some jerky reactions may give another buying opportunity to the gold bulls.
Fund managers believe that even though gold may not rally, allocation in gold is essential for diversification. ”
While returns are a major motivation for investing in gold, it should be remembered that the utility of gold is much more than that. It is also a source of liquidity, a portfolio diversification and an asset that can help counter the effects of high inflation on a portfolio. Thus buying gold can be a good step for your overall financial well being. So as tradition demands, go ahead, appreciate the strategic role of gold in your portfolio, take advantage of the low prices and buy gold this Diwali. Preferably through efficient financial forms like Gold ETFs and Gold Mutual Funds,” says Chirag Mehta, Senior Fund Manager- Alternative Investments, Quantum Mutual Fund.
“We are bullish and continue to maintain a positive bias for gold price over the next 12 months, and expect consolidation to extend and may see some directional moves soon. There could be some short-term hiccups in the current scenario. which could give investors a better buying opportunity.We believe gold has the potential to once again move towards $2000 and may even create a new lifetime on Comex. On the domestic front, we expect the prices to move towards higher levels of Rs 52,000-53,000 in the next 12 months,” said a report by Motilal Oswal Financial Services.