Is Now The Right Time To Invest In Gold With The Rupee Showing Signs of Weakness?

Is Now A Good Time To Purchase Gold?In addition to improving profits, diversifying your investment portfolio with the aid of gold lowers volatility and minimizes losses. A component of the investment portfolio should be kept in gold, according to financial gurus, since it reduces losses during equities downturns. Experts advised investors to take advantage of the upward trend in gold since the rupee is now displaying symptoms of weakness versus the dollar and the Indian holiday season is quickly approaching.

“The robust festive demand in India is poised to maintain stable gold prices,” said Jateen Trivedi, vice president (research) at LKP Securities. A sensible starting point for investors looking to buy gold is within the current range of Rs. 58,500 and Rs. 57,000.

Investors should think about taking advantage of the upward trend in gold given the rupee’s symptoms of weakness versus the dollar and the impending Indian holiday season, he said.

On Wednesday, August 23, the price of 10-grams of 24-carat gold in India increased by Rs 100 to Rs 59,230 from Rs 59,130 the previous day.

Last week, the rupee hit an all-time low versus the dollar of 83.1. The rupee rebounded from its record-low levels on Tuesday of this week and ended the day 14 paise higher at 82.99 versus the US dollar.The cost of gold rises as the rupee declines.

One of the world’s biggest users of gold is India.

According to Trivedi, gold prices “are anticipated to remain steady, if not rise significantly due to the impact of a stronger dollar and elevated interest rates given the ongoing trend of global central banks acquiring gold and the uncertain global economic landscape.” The course, though, might abruptly alter. Gold prices are anticipated to increase the instant the US Federal Reserve suggests a possible halt in its rate rises or even the prospect of a rate decrease.

Considering these elements, investors may legitimately forecast a bullish view for gold, anticipating price levels between Rs 61,000 and Rs 62,000 by the end of the year. It’s a planned move that coincides with both the depreciating rupee and the customary jubilation of the Indian holiday season, he said.

Since July 2018 and over the previous five years, gold has increased by 99%. The Sensex, on the other hand, has only increased by 77% throughout that time. The rupee lost 31% of its value during this time, falling from 63 to 82 to the dollar.

According to analysts, central banks purchasing gold to increase reserves, dismal economic forecasts, supply chain concern due to the pandemic, geopolitical tensions, and currency uncertainty were the causes of gold outperforming the Sensex.

“The market continues to be unstable. Economic statistics reveal China’s deterioration. Prices for gold are favored. According to Jateen Trivedi, investors should think about holding 20% of their investments in gold.