Gold continues to flirt with record high levels! In the first four months of 2024, RBI added 24 tonnes of gold to its reserves. 24 tonnes is one and a half times the total 18 tonnes of gold RBI bought in all of 2023. With this, India’s gold reserves have surged to over 822 tonnes, making us the eighth largest in the world, just behind the US, Germany, Italy, France, and a few others.
And its not just our central bank that is lapping up the yellow metal. China has been on a shopping spree too. So far in 2024, China has accumulated 29 tonnes of gold. And during the past 18 months, China’s holdings have increased by 316 tonnes taking its Gold tally to almost 2000 tonnes!
So are India and China responsible for driving up global gold prices? Or is there a gold rush that India and China are both after?
In recent years, geopolitical tensions have reached a tipping point. It all started with Russia invading Ukraine back in February 2022. The unrest spilled over to West Asia with skirmishes between Iran and Israel, and Israel’s war against Hamas. Not to mention, the ever-contentious trade relationship between the US and China is heating up once again. All these conflicts have shaken investor confidence, driving many to seek refuge in gold.
But why gold? Well, throughout history, gold has been seen as a safe haven during times of uncertainty and political upheaval. Unlike paper currencies, gold holds intrinsic value and doesn’t rely on any government’s stability. It’s durable, universally accepted, and tends to maintain its value over the long term. So, when the world seems uncertain, investors turn to gold as a way to protect their wealth.
And the strategy seems to have paid dividends….gold is up 14.5% so far in 2024….outperforming…equities which have delivered returns of about 5%
So, let’s get to the age-old question: should you buy gold right now?
Experts suggest that given the possibility of heightened volatility, gold – which is also reaching new highs – might be a worthwhile investment. As part of a diversified portfolio, gold can act as a hedge against inflation and macroeconomic uncertainties.
While waiting for the perfect investment price is always risky, it’s even riskier with alternative assets like gold. Considering the current economic climate, incorporating gold into your asset allocation could provide stability and protection against market fluctuations.
India’s gold reserves have surged to over 822 tonnes, making us the eighth largest in the world, just behind the US, Germany, Italy, France, and a few others. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
