Gold prices are on fire. On February 11, it was priced at $ 2,913 an ounce. The price of gold between 31 December and 11 February has increased by 11.6 % in terms of dollars. In terms of rupee, gold reached Rs 85,635 per 10 grams on December 11. This means that Gold has given a return of 13 % this year. However, the prices of gold are higher than this in different cities and it means that its return is more than 13 %. This boom in gold is seen at a time when the stock market is declining.
Why is the rise in gold in gold?
The question here arises that why is this boom in gold prices? The answer in two words is- US President Donald Trump. Trump is taking many economic decisions, which makes him and his colleagues feel that the US economy will help. These measures can cause turmoil in global economy. In such a situation, many investors are seeing gold as a safe hideout of investment. Due to this, there is a lot of investment in gold and prices are also rising.
Why is the return more in terms of rupee?
The direct answer to this is that in the last few months, the rupee has seen a lot of weakness against the dollar and due to this, the return of gold has improved further in terms of rupee. In addition, to understand why gold investment is a safe place, you have to know about the Lindy Effect. The basic meaning of Lindy Effect is that the longer something is, the more likely it is to remain in the coming days.
Now the question is how it applies as a safe base of effect gold and investment? Gold has retained its value for centuries. In the era of any kind of political, economic and financial political instability, many people see gold as a full investment. It is a reliable way to protect the property. The practice of keeping it as a safe base of investment has been going on for hundreds of years. In such a situation, it can be said that gold has been a safe place for investment before and it will remain a safe place for investment in future also.
The fourth thing is that the media is still full of news related to gold. In some reports, it is being said loudly to include gold in the investment portfolio. This question is being asked in some other news: Should you invest in gold right now? However, the most important point in these reports is missing that the investment portfolio should always have diversification, as no one knows about the future.
In the last few years, if someone had invested in gold, its investment would not have been better than the investment of the stock market. However, in the last few months the case has been overturned and gold performance has been better. It is very difficult to predict these things. Therefore, it is not very important to call it important in terms of portfolio diversification when the price of gold is fast. Also, anticipating gold prices in future is also a difficult task because there is no way to know about it.