I remember, gold looked like it was going nowhere, in a rush. I guess, it’s still at the same price as it was five months ago in late July. And we ask, "Will it ever rise again?" Well, in case this is what people believe, they probably need to gear up themselves perhaps with a bit of more patience. There are also all underlying causes to catch a pace. Although gold doesn't really gain traction nowadays, it is going to be soon. For insight into the economic outlook of investors, analysts monitor commodities such as gold and silver, especially during times of economic instability and variability in other financial markets. It has gone from $3.75 trillion to $7 trillion in the last year alone. This is a remarkable reason to own gold. In times of recession or volatility, gold’s demand usually surges, especially if financial markets collapse, as they did earlier this year. In March, as the coronavirus pandemic worsened in the United States, precious metals prices reached a seven-year high, observing feelings of anxiety about the ability of financial markets, especially central bankers, to endure the economic hit. Gold prices are going to rise the same way as the COVID-19 cases all over the world. The Federal Reserve has held interest rates extremely low since March in order to keep capital markets fairly balanced and to make debt levels as low as possible to boost up the economy. The decision was also taken to purchase hundreds of billions of dollars in shares. That further brought down yields, making investors more attracted to gold and its risk of return. The higher gold rates jump, the more experts and economists speak about it and the more they report on that in the financial media. In general, added transparency results in more demand from investors; that is why some experts predict rates to go much higher. Inflation and generalised volatility are typically enveloped from gold. For the long term, the precious metal is relatively stable and its worth is not readily depreciated by external forces or other currencies. Gold still looks like a good medium to long term purchasing possibility for investors who overlooked the spike earlier, with rates trading about $1,850 per troy ounce at Comex and Rs 49,000 per 10 grams in India. The accommodative status of central banks and the anticipated timeframe to be taken to regain the world economy preserve the gold firm's future growth potential as a safe haven. For investors seeking expansion by gold, it is a rare opportunity, given their low prices when compared to all-time highs in August 2020. Phillip Streible, an expert for Blue Line Futures, estimated that by December 2021, gold might reach $2,500. A booming bull market in equity also imposes pressure on the yellow metal, backed by the positive mindset towards vaccines. Other market analysts believe it shall start as early as by the end of the year. It wasn't the first time that gold investment demand has increased, raising prices and going to discourage Asian investors amid an era of global uncertainty. However, the aspect that concerns about coronavirus may play is uncertain. Consumer purchasing in China and India after the global financial crisis recover from lowest for a year, but it took the overall demand in the region to reach the highest level in one decade before 2013—and a drop in the rates. Therefore, we will witness that it will be quite challenging for the jewellery sector in the coming years. Thank you.
Regards,
Sneha Singh,
Kautilya,
IBS Mumbai.
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