Gold needs to be embraced as portfolio diversifier – experts

There is a need for investors to embrace gold as a portfolio diversifier and for hedging strategy especially in the current environment that presents uncertainties, according to experts.

The yellow metal is expected to have a good run in the coming times as demand will emerge, and it should be seen as part of portfolio diversifier by an investor at this juncture.

The experts said this in a webinar on ‘Gold Investment Opportunity and Price Outlook’ organised by the PHD Chamber of Commerce and Industry (PHDCCI) on Wednesday, The Economic Times reported

“Demand for gold will grow in the future. Therefore, the industry should take certain measures to address the current low demand for gold,” World Gold Council Managing Director (India) Somasundaram PR said.

Currently, as per the All India Gem And Jewellery Domestic Council, demand for gold is sluggish in the country following economic slowdown, job uncertainties and disruption caused by the coronavirus pandemic.

“Gold should be looked as a portfolio diversifier and is absolutely going to have a good run in the coming times as demand will come back,” Somasundaram said.

The government must provide some relief measures like exemption of capital gains tax to provide impetus to the gold market in the coming times, he added.

PHDCCI President D K Aggarwal said the gold prices have significantly increased and crossed the level of Rs 50,000 per 10 grams, mainly on the back of disruptions caused by the coronavirus pandemic.

“The monetary loosening will continue in the coming times and drive the gold prices,” he added.

Aggarwal said gold provides a hedge against currency fluctuations, and gold diversifies and stabilises investment portfolios in times of adversity.