Why A Volatile Market Is Worthy…..

Uncertainty. That’s the norm which seems to be in everyone’s mind; on every jeweller’s lip. With the rates of the precious metals sky-rocketing, there just seems to be no respite for a state of equilibrium. With every passing day, eyes are transfixed on the screen which never seems to set a figure to invite trading. Movement seems to be restricted – out of default rather than design – and it appears this will continue for a while.

But is there a silver lining to this element of incertitude? Let us break down some facets which could show light at the end of this prolonged darkness…

 The geopolitical asymmetry.

With all the goings-on around, it is a compelling belief that rates will only escalate based on the volatile geopolitical disharmony. However, how much of this will hold truth in time to come remains to be seen. To dissect,

·       Gold as a safe investment. The wise will always move their assets towards gold since this is the safest haven for investment. It is stable and will continue to deliver as has been its behavioural pattern since time immemorial.

·       Long-term perspective. Geopolitical tensions often cause short-term fluctuations and the way out is an investment strategy that should consider a diversified portfolio and not rely solely on gold for returns. However, in today’s scenario, gold alone has been the proven asset for returns.

·       True value of Gold. So, why is gold so valuable? It’s because it’s real, has true worth, is rare, and doesn’t move with other investments. This makes gold a great addition to any investment mix.

India as a Gold Treasurer.

·       Increased Value of Gold Reserves: As India holds a significant amount of gold in its reserves, a rise in gold prices would increase the value of those reserves, potentially strengthening the country's overall financial position.

·       Exports acceleration. While India is a net importer of gold, rising prices could incentivize exporters of gold-related products (like jewellery) or even doré (unrefined gold) to increase exports, leading to a positive impact on the trade balance. 

While it surely is a wait-and-watch situation, there is bound to a robust trade activity towards the latter half of the year in India and with our economy strengthening its hold over others, India is poised to deliver and be a business hub sooner than expected.

There surely is a silver lining. And that’s the moment of gold. For India, that is.