Zee Media Bureau
New Delhi: Gold reflected a sustained downward pressure days after its steepest drop in almost two years, with more losses seen ahead as the demand outlook dims.
In the domestic market too, gold showed a weakening trend. Though it is a perturbing sign for many investors who have parked their fund in bullion market, things might not be so gloomy for household Indian buyers.
Here are five things which the customers can watch out for.
1. Goldman Sachs Group has predicted further decline in the yellow metal's prices and holdings. Therefore it is a very good time to invest in gold before the price show a significant correction.
2. Investors are shunning the precious metal and investing in the dollar as their preferred sanctuary from volatile markets. But if you have invested in gold (ETF, coin or jewellery, gold futures) there is no need to panic. Unless there is an emergency, it is not advisable to sell gold at this point. Sit and wait for the right time and opportunity.
3. Though volatility and uncertainty in the bullion market has been persistent for some time, a price correction cannot be ruled out. This goes strictly for the sellers. Wait and watch seems the best option as of now.
4. If you want to diversify your portfolio, you must consider a few things. At this point, you can invest 30-40 percent of your total budget in buying gold and release an additional chunk after further price correction. Looking at the market situation, it does not seem that gold will jump beyond Rs 30,000 anytime soon. Even if there is a price correction, you can take the risk.
5. Correction in the price of gold will indeed reduce the burden on current account deficit which has been a major concern for the current government. A lower current account deficit will help the government to go forward with its welfare schemes, infrastructure development and flagship programmes aimed at benefiting the common man.