Dhanteras 2021: Can buy on dips strategy work for gold investors? What experts say
1 min read . Updated: 01 Nov 2021, 08:18 AM IST
PremiumGold has been a portfolio diversifier in the long term time frame as the returns in gold balance the overall risk-reward for any investor
In India, there is a tradition of buying gold and silver in some form on Dhanteras The demand for physical gold and silver may see a rise this month due to Dhateras and Diwali and also because the wedding season has kicked in. What should the buyers do?
Gold has been a portfolio diversifier in the long term time frame as the returns in gold balance the overall risk-reward for any investor. The yellow metalhas performed in double digits for most of the past 8 years, starting from 2014 to 2021 YTD.
The drops in the price of the yellow metal in 2021 has been a boon for Indian buyers of gold as forecast from the World Gold Council indicates that India's gold demand could strengthen significantly in the fourth quarter. Demand for the precious metal usually spikes towards the end of the year in India, as buying gold for weddings and major festivals such as Diwali and Dussehra is considered auspicious.
In a report published recently by the World Gold Council, it said gold demand in India jumped 47% in the third quarter from a year earlier to 139.1 tonnes as jewellery demand surged 58% to 96.2 tonnes. On the other side, the global gold demand has been 9 per cent lower YTD.
Brokerage firm Angel One advice to investors this Diwali
Our advice to investors is to purchase gold this Diwali as it is advisable to divest at-least 10 per cent of one's portfolio into gold and Diwali is an auspicious occasion to buy the yellow metal. The growth path remains divergent across the developed and the developing economies and so is the case with regards to the vaccination programmes. Till the time, the central banks globally do not converge on raising interest rates, gold prices will have a stronger run in a year time frame.
We expect gold prices to move higher towards ₹54000/10 gms till next Diwali and investors are advised to take dips as an opportunity to accumulate the metal.
Whatever is the scenario, gold has been a go-to asset class for investors in times of uncertainty and if one wants to benefit from diversifying into gold, there are various ways to accumulate gold in India.
