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Gold A Better Performer Than Shares This Year; Should You Buy For 2017?
Gold might beat performance of shares this year, based on the key domestic benchmark indices performance.
This year the stock indices have been worst performers when compared to gold. While individual stocks may have beaten gold returns, several stocks may have yielded significantly lower returns than gold.
A quick comparison
For example, the Sensex which closed on Jan 1, 2016 at 26,160 points, has given negative returns, if you consider the current closing of the index of 26,040 points. Gold on the other hand which was close to Rs 25,550 per 10 grams in India at the start of the year has yielded marginal returns considering a current closing of Rs 26,650 for 22 karats 10 grams currently. For a change gold has been an out performer for 2016.
Check gold rates in all Indian cities here
Will the trend continue in 2017?
We believe that it maybe a year of gold being extremely volatile and still churning out returns for investors. The precious metal is still capable of generating returns and let us tell you why. The first is that nobody is sure of the policies of newly elected American President Donald Trump. Any adverse actions of his that could lead to geo-political tensions. And, this could lead to gold prices flaring. This should provide an excellent opportunity for investors of gold.
Gold has crossed Rs 30,000 a few months back
Gold prices had gone-up only recently and have dropped from levels of Rs 30,000. So, what you are getting today is gold at 10 per cent cheaper. The metal during 2017, will and definitely can provide similar returns because it is likely to be very volatile with geo-political tensions and economic stagnation. So, if you have not invested in gold as yet, now would be the time to bet on the precious metal. It is a perfect time recipe for success in the environment that we are living with low economic growth across the world, terrorist attacks and threats of war.
US Fed may not raise interest rates 4 times this year
Gold prices largely depend on how interest rates move. We do not think the US Fed would raise interest rates three times this year, as most analysts anticipate. In fact, we believe that the US Fed would at best raise interest rates two times. This should help support prices of the precious metal.
Conclusion
Making money on gold depends on what price you buy the same at. If you buy gold at around the Rs 25,500 levels, there is a high possibility that you could end-up making money in 2017
