The price of gold has grabbed headlines for a considerable time in 2024 since it fed on global geopolitical uncertainty, risks in the run-up to the US Presidential polls, and interest rate trimming by major central banks around the world. In India, additional demand during the October-November festivities also pushed up demand, and therefore, prices, in the domestic market. But since Donald Trump triumphed in the race to the White House, the prices of gold have dipped.
The pause in the constant appreciation in the prices of the yellow metal, all over the world as well as in India, has made many investors wonder about their investment strategy in gold. However, Aditya Modak, the CFO & COO of P N Gadgil & Sons, which recently had a successful IPO of Rs 1,100 crore, has a strong word of advice for those investing in this timeless yellow metal.
What fluctuation in prices means for owners
“Gold prices typically fluctuate by a maximum of 2-3% on the downside. Most of the time, prices remain constant or even positive. When investing in gold, avoiding a short-term perspective is important, as minor fluctuations occur regularly,” Aditya Modak, CFO & COO of P N Gadgil & Sons told News9live.
Modak’s advice is if anyone makes an investment for a period of at least 5 years, the investor won’t lose money. “Instead, you’ll likely see good returns, and, most importantly, gold serves as an excellent hedge against your other investments,” said Modak.
Why gold will never lose its sheen
Uncertainty is the time when gold shines the brightest. “When faced with uncertainty, almost all central banks shift their investments from currency to gold. Additionally, gold is widely used for consumption, particularly in the form of jewelry. This dual purpose of gold, as a safe haven and a luxury item, ensures its high demand and value, making it a secure investment,” Modak reiterated.
The next push to gold prices
Experts have pointed out that the next trigger to gold prices could come from the continuing geopolitical crisis – especially in West Asia – and the expected interest rate cuts by the US Federal Reserve in 2025. These two factors can again help resume the northward march of gold prices, some experts have already said. And since India imports a lot of gold every year, the upward pressure could be witnessed in the Indian market too.
Though gold has come off its recent peaks just before the US presidential election on November 5, 2024, the investor should shun short-term perspectives. The next push can come from rate cuts by the US Fed. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
