Gold, according to some market observers, has been deemed an asset not worth investing in the past, despite its role as an asset to ‘fall back on’ during times of crisis.
The Gold Rush
In the past, some have pointed out that Gold does not usually give returns. However, the development in the past few weeks and months has brought the question back to the fore. Is Gold a good investment?
While, like other aspects of the market, there is no straight forward answer to the question, the recent surge in the value of the metal is telling.
In the international market, the value of gold has risen to the USD 3,000 mark. In the city of Mumbai, the commercial capital of India, the value of gold has surged past the Rs 90,000 mark for 10 grams of 24k gold. And it saw a meteoric rise in the past week of trade.
It increased in value from Rs 88,545 per unit to Rs 90,355 in the five days, making a jump of Rs 1,810 in just a week.
In the past month, the value of gold has risen by Rs 2,800 per 10 grams, marking a rise of 3.19 per cent.
Why is This Happening?
This is happening at a time when global trade and the world economy at large have been tatters owing to the volatility induced by US President Donald Trump’s tariff policies.
These tariffs have only resulted in more chaos and confusion, apart from kick-starting a trade war, with trading partners imposing tariffs and counter-tariffs against each other.
This is happening at a time when global trade and the world economy at large have been tatters owing to the volatility induced by US President Donald Trump’s tariff policies, which has only resulted in more chaos and confusion, apart from kick-starting a trade war, with trading partners imposing tariffs and counter-tariffs against each other. | File Pic
This larger volatility has brought the biggest economy, and its financial system, meaning its security bonds and currency, the US dollar under tremendous pressure.
This pressure has arguably made investors deposit more of their faith in the Gold than in the secondary market. This surge has coincided with fall of stock markets, especially over the past fortnight.
With this tumultuous situation prevailing and further plaguing the market, the chances of gold prices further increasing cannot be ruled out with certainty.
