CHENNAI: Mirroring the global trend, gold climbed to over Rs 53,000 per 10 gram on Monday, the highest in nearly eight months, as investors rushed to the safe haven amid soaring oil prices.
In the international markets, it breached the $2,000 an ounce mark for the first time since August.
While the World Gold Council (WGC) expects gold prices to firm up on the back of the global crisis in the wake of the Russia-Ukraine conflict and concerns over rising inflation, it cautioned investors on price volatility.
“Gold is a well-established hedge against systemic risks and unexpected market events. It has therefore, attracted a lot of positive attention and is performing better as investors would expect in times like this, with a strong upward bias in expectations linked to how the uncertainty unfolds in terms of inflation and market volatility in the post-crisis scenario,” Somasundaram PR, regional CEO, India, WGC told TOI.
Gold’s negative corelation to equities and other asset classes increases when markets are in turmoil and these assets face strong headwinds. “The gold price has risen over the past month on the back of inflation concerns and the potential effect of the current geopolitical crisis on financial markets and more generally, on various currencies,” he said.
On the domestic front, WGC expects retail demand to remain healthy. In the coming months, retail demand can be expected to remain high and improve on the back of an overall economic growth and a more positive sentiment as markets emerge from the covid clouds, with festivals like Gudi Padwa and Akshaya Tritiya providing an impetus. Market volatility and inflation concerns arising from the current global crisis could also make people buy more gold.
“On Monday, gold prices witnessed high fluctuations through the day as the rupee weakened against the US dollar and concerns over the Ukraine crisis. In times such as this, when stock markets are also in turmoil, people see gold as real currency and opt for it,” Jayantilal Challanipresident, The Jewellers and Diamond Merchants Association – Madras said.
“On the retail front, only those people with a commitment like weddings are buying. While investors are preferring to wait, even those part of 11-month gold investment schemes are waiting to convert,” he added.
In the international markets, it breached the $2,000 an ounce mark for the first time since August.
While the World Gold Council (WGC) expects gold prices to firm up on the back of the global crisis in the wake of the Russia-Ukraine conflict and concerns over rising inflation, it cautioned investors on price volatility.
“Gold is a well-established hedge against systemic risks and unexpected market events. It has therefore, attracted a lot of positive attention and is performing better as investors would expect in times like this, with a strong upward bias in expectations linked to how the uncertainty unfolds in terms of inflation and market volatility in the post-crisis scenario,” Somasundaram PR, regional CEO, India, WGC told TOI.
Gold’s negative corelation to equities and other asset classes increases when markets are in turmoil and these assets face strong headwinds. “The gold price has risen over the past month on the back of inflation concerns and the potential effect of the current geopolitical crisis on financial markets and more generally, on various currencies,” he said.
On the domestic front, WGC expects retail demand to remain healthy. In the coming months, retail demand can be expected to remain high and improve on the back of an overall economic growth and a more positive sentiment as markets emerge from the covid clouds, with festivals like Gudi Padwa and Akshaya Tritiya providing an impetus. Market volatility and inflation concerns arising from the current global crisis could also make people buy more gold.
“On Monday, gold prices witnessed high fluctuations through the day as the rupee weakened against the US dollar and concerns over the Ukraine crisis. In times such as this, when stock markets are also in turmoil, people see gold as real currency and opt for it,” Jayantilal Challanipresident, The Jewellers and Diamond Merchants Association – Madras said.
“On the retail front, only those people with a commitment like weddings are buying. While investors are preferring to wait, even those part of 11-month gold investment schemes are waiting to convert,” he added.