Gold Prices Continue To Be High. Should You Invest?

As gold prices continue to increase, investors wonder if they should boost their investment in the yellow metal in 2023. The pandemic and geopolitical tensions have caused economic uncertainty, leading to a surge in gold prices. The Reserve Bank of India (RBI) has even joined the gold-buying trend, purchasing 10 tonnes of gold in March 2023.

According to experts, gold is commonly viewed as a reliable investment option for your portfolio, as it serves as a hedge against inflation and diversifies your investment assets. Given the current instability in the banking sector and the ongoing discussion of a potential recession, many Indians may seek additional stability. With the upward trend in gold prices, it may be worthwhile to consider investing in gold.  

Should You Buy Gold Now?  

According to Arijit Sen, a Sebi-registered investment advisor and co-founder of Merry Mind, gold is often used as a hedge against inflation. He recommends adding up to five to ten per cent of your total investment portfolio in gold, depending on your investment objective, risk profile, time horizon, and macroeconomic factors. However, he also warns that gold price volatility is normal, and it's important to understand if investment in gold aligns with your specific requirements.  

Shweta Jain, Founder of Investography, believes that exposure to gold is common among Indians. However, many young families are not prioritizing gold due to lifestyle expenses and other goals. She suggests allocating 10-15 per cent of your assets to gold but recommends doing it on a staggered basis.  

While gold has historically been viewed as a safe haven asset, it's essential to do your due diligence before investing. As with any investment, assessing your investment objective, risk tolerance, and horizon is crucial before allocating funds to gold. Furthermore, it's important to remember that gold is not a guaranteed investment, and its price can be volatile.  

Evaluating any new investments based on your individual financial objectives and overall financial condition is crucial before reaching a decision. If you are uncertain, seeking guidance from a professional can help you determine the most suitable investment options for your needs. As Sen aptly puts it, "Investors must not get influenced by recent trends and should understand whether an investment in gold makes sense for their specific requirements."