In short-term gold is likely to be influenced by the interest rates and economic recovery ahead. Yet for longer-term strategic investors an allocation to gold could help boost overall portfolio health, and provide the resilience needed, as investors re-position for what promises to be a decisive decade ahead.
Silver is currently trying to settle back above $22.30 while U.S. dollar is gaining some ground against a broad basket of currencies.
Gold’s path ahead depends upon whether inflation continues or not and how Fed will respond to it
The domestic gold price ended 2.4% lower in August at Rs4,710/1g. Retail demand increased during the month with a correction in the gold price and wedding purchases. Official imports hit a five-month high in August. The Reserve Bank of India (RBI) added 14.9t of gold in August, increasing its total gold reserves to 726.1t
The Gold-Silver Ratio (XAU/XAG), is the number of ounces of silver it takes, to buy one ounce of Gold. It shows the relative performance of both Gold and Silver. But, is it worth tracking?
Driven by stable gold prices and economic recovery, gold jewellery sales are about to increase by 12-14% in first quarter says experts
The Silver Institute’s this year forecast average prices to rise 33% year on year, decent assets should be making money. Silver demand will increase, maybe in next 6 months or 6 years, but its time is definitely coming.
Gold prices are not increasing because there are no factors pulling it outside its range. Consumer buying of gold has increased since July, especially in India and China. Gold trade is here to stay. It’s just that gold is holding its price for now.
As long as the Federal Reserve is engaged in inflating asset prices and forcing investors to take on excess risk, gold will likely continue to underperform. Will that eventually change? Absolutely. When? As soon as the market participants realize the error of their ways.
