Gold prices are constantly grabbing headlines this year, initially for a vigorous rally and since Dhanteras/Diwali for declines. This is how CFO & COO of P N Gadgil & Sons, Aditya Modak, explains the volatility. Those who were elated by the constant rally in the price of gold for the first 10 months of this year, have been rather surprised at the decline in prices of the precious metal since Dhanteras/Diwali – the drop ranging to around 6%.
According to data, the price of 10 grams of 24 carat gold has dropped from Rs 80,700 odd to about Rs 74,000. Why are gold prices falling? A strong dollar and an apprehension of the US Fed halting rate cuts due to inching up of US inflation is fuelling this decline. Gold prices fluctuate on account of a various factors.
These are prices in the global markets (since India imports lot of the metal every year like crude oil), the exchange rate of the rupee against the US dollar, the demand in the domestic Indian markets, and last but not the least, geopolitical tension in the world. What to invest in Gold? ‘Avoid short-term perspective’ The key advice from Aditya Modak is to avoid short-term perspective while investing in gold. “Gold prices typically fluctuate by a maximum of 2-3% on the downside.
Most of the time, prices remain constant or even positive. When investing in gold, avoiding a short-term perspective is important, as minor fluctuations occur regularly,” Modak told News9. Invest in the long term and you won’t lose money,.