Gold Prices are down by 20 percent. When should you invest?

For the last two years, the gold investment was doing good. But now gold prices have been coming down continuously for the past few months. Now almost 21 percent below hit the last year in the Indian markets. The fall is equivalent to the one in global markets and business.

There is no reason to point out the fall in the gold price. There would be a combination of factors for this fall. The US dollar is continuously gaining the upper hand against major currencies. Then, after the ending of lockdown after the first wave, across the world, the claim for riskier assets returned. It is witnessed in the stock market rally. All these main factors have put downward pressure on gold prices.

So, the question arises can the gold prices fall anymore further after the 20 percent fall? So, the answer is, “It is possible”. That is still hard to predict what will happen in future price.

Before you invest in gold, you must be aware of the present scenario and gold behavior in the market.

The fluctuation in the gold prices is more likely to be dependent on the supply-demand equation and geopolitical events, etc. This impacts the supply-demand equation and behavior. Gold is not like any other asset class that can be evaluated based on cashflow or intrinsic value. Because of this reason, gold prices always tend to stay constant for a longer duration of time. After that sudden increase or decrease in gold prices is seen.

So, if you are planning for gold investment, then you can generate good returns in the short term. The investors should keep themselves updating with the latest market scenario.


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