Gold Investment: The decline in gold has increased further due to the increase in the 10-year bond yield in the US.
Gold Investment: Gold prices remain weak this year. In the US, the fall in gold has increased further as the 10-year bond yield increases. Gold slipped below Rs 44300 per 10 gram in trading on March 5. This is the lowest level for gold in the last 10 months. In August last year, gold had strengthened to a record level beyond 56200. That is, in 7 months, it has come at a discount of about 12000 rupees per 10 grams. By the way, experts are considering this huge discount a good opportunity for new investment in gold. If you look at the return history of the past several years in gold, then there is a record of a rise in it in the coming days. By the way, there are some other factors in the current era, which can support gold further.
First know why gold is weak
The 10-year bond yield in the US is picking up and has reached a high of around 1 year. This reduced the attraction for gold. On the other hand, in the last 4 to 5 months of the stock market rally, many investors are investing money in equity or equity related instruments. Equity has increased compared to asset class like gold due to Carona virus vaccination worldwide. The strengthening of the US dollar and weakness in gold demand have also been the reasons for the fall in gold.
History of gold boom in the coming days
Gold is currently seen at a huge discount of Rs 12000 from the top level. If we look at the coming months, the return history of the last 10 to 11 years says that gold will gain further momentum. However, this boom will be stable after May. Investing in gold from current levels in June, July and August can provide good returns.
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Average Return in last 11 years
March: (-) 1.43%
April: 2.38%
May: (-) 0.16%
June: 1.45%
July: 1.47%
August: 6.59%
(Source: Kedia Advisory)
If you look at the data from March to August, after the fall in March, in April, in the last 11 years, there has been a record of an increase of 2.28 percent on an average. After a slight pressure of 0.16 per cent in May, gold has been giving excellent returns in June, July and August.
How fast is gold ahead
Ajay Kedia, director of Kedia Advisory, has given a target of 52500 rupees / 10 grams in gold in the next 6 months. That is, about 8000 rupees per 10 grams more than the current level. They say that new types of corona virus cases are coming up in some countries including Europe. There is an expected correction in the equity market. In big countries including the US, it will take time for the economy to become completely normal again. Further, central banks have also indicated buying in gold. Gold will be supported by this.
