Q&A: Is it the right time to invest in Gold, how much and in what form – Physical, ETF, or Gold MFs?

financialexpress.com:

A Gold-buying rush is expected to start soon ahead of the upcoming Dhanteras and Diwali festivals. In this online Q&A, Chintan Haria, Head of Investment Strategy at ICICI Prudential AMC answers important questions investors should know before going for the yellow metal.

As there seems no possibility of a ceasefire in Gaza conflict anytime soon, how is gold seen as an asset class, as it is already at its peak?

During times of geopolitical instability, investors typically tend to opt for safe haven asset class like gold as geopolitical turmoil has the potential to cause economic instability and volatility. In such scenarios, gold acts as a hedge, giving investors access to a liquid and stable commodity that they can easily turn into cash when needed.

Unlike paper currency, gold is not susceptible to depreciation due to inflation or unstable political environments. Furthermore, gold has low correlation with other financial assets like equities and bonds, making it a useful instrument for diversification, thereby mitigating risks in a portfolio. All of these factors make gold an attractive asset class in current market environment.

There are talks that it might even touch 70,000 mark. Do you think it’s possible? Does it mean that some flows from equity may flow to Gold? What could be the other triggers that may influence golds trajectory?

Gold in Dollar terms has been flat over the last 12 years. In this timeframe, equity and bond markets saw a rapid rise in institutional and pension fund exposures. Now, due to rising interest rates and geopolitical tension, Central Banks have shifted towards gold. World Gold Council data shows that China has been continuously adding gold over the past few months.

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