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Should You Buy Gold At Its 5-Year High Price?


The unending trade spat between the US and China and now with Iran has again bring a sheen in the precious metal, with gains in the metal being the highest in 5 years. The gold price has now outshined the previous highs of 2012 and reached new levels of Rs. 31, 248 per gram. And if the global turmoil continues with no resolution in the near term, the metal is said to be well supported in price.


Should You Buy Gold At Its 5-Year High Price?

Why gold is gaining ground?

The precious yellow metal is gaining in price as mainly because China that happens to be the world's largest producer as well as consumer of gold is facing threat of slowing economy amid the US hiking tariffs on its imports from the country. Meanwhile, the escalating turf between the US and Iran is further worsening global political uncertainty outlook.

Also, the beginning of a phase wherein central banks world over are hoarding the gold supply is pulling its demand, and hence its price higher. As per a WGC report, the total accumulation of central banks world over stands at over 30,000 tonnes as on February, 2019.

Another view that is held for the rise in gold price is the current stance of economies world over where they now are turning to a dovish or neutral outlook to provide a boost to the ailing economies.

And the uncertainty qualms that spark everywhere, will keep the well supported and in fact rally in the coming quarters.

Should you invest in gold now?

For long term investments into gold, investors given the current high pricing should wait for the dip to come and then get into buying the metal. And also, with key policy rates hovering lower, one can definitely expect some reasonable gains from the commodity.

Nonetheless, short term investors are asked to be cautious given the landscape "wherein the metal is rallying high", adds a key executive from a brokerage firm.

Story first published: Saturday, June 22, 2019, 12:25 [IST]
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