Is Gold Losing Its Shine For Investors?

Samara Davis
By Samara Davis
editor

April 7, 2021


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  • Synonyms to investment, gold in India is looked up to during every celebration, it is treated as a superior investment by generations of Indians. Its place in Indian households needs no introduction, however, with uncertain times looming globally there is wide speculation that gold is losing its shine amongst investors. But wait are we really talking about gold here? Yes the gleaming yellow metal Vs the ever dynamic market, the grand gold Vs investor’s confidence.

    Gold has forever lured Indians, this is often an open secret to the world over that India and Indians are synonyms to gold. Those fancy gold earrings design that caught your eye is far less than what it was last year, but wondering how? here are a few insights to help you understand the pulse of the market as well as investors.

    Experts take

    Falling prices of gold in India and globally have been largely pointed out to improving economic conditions, vaccine rollout, and several other investor sentiments. What is now seen as declining may not be really a fallout suggest some experts. They are only momentary and seen as a correction in gold price than a fallout. 

    What led to the rise?

    Investors for years perceived gold to be a safe haven for investment in times of uncertainty. The same was the scenario last year because of the pandemic, gold has seen an unprecedented rise because it was increasingly sought after for safety.

    Has the yellow metal bottomed out?

    Today the gold price in India swung down, a prime reason is because of the spurt of economic activity. The increasing investment in stock market, mutual funds, market instruments, and other investment avenues have led to shade the investment in gold. What was unconditionally on the rise last year has come to a correction mode. The decrease is however not settled yet.  There is every chance it may further decrease or stabilize it at this juncture. 

    Investors take

    Many of those investors who have waited for gold prices to decrease find it the right moment to buy and save for a future repurposing. While many investors speculate there would be a further drop, some of them are investing in physical gold coins than Jewellery. i.e. 24kt gold bars and coins for storing than Jewellery. With growing doubts on the second wave of the pandemic, gold is still eyed as a safe investment option by many traditional investors in India. But with the upcoming wedding season, the rates are sure to go up as a seasonal effect. 

    A growing trend

    Gold which was once bought occasionally for household celebrations and investment purposes is now purchased casually too. With more and more women working, the added sense of financial independence has contributed to excess disposable income. With disposable income in hand what better way to shop than buying gold Jewellery. 

    Factors such as these also contribute to the continuous fluctuations in demand and supply of gold, its price, and imports too. 

    With thriving markets neither gold nor any other investment avenue has lost its sheen, the temporary ups and downs in the price is merely a correction to the already bloated price bracket. Hence, the lowering prices are sure to stay and bring cheer, for those of you looking to invest tank some gold coins when the price is right.

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