We’re bullish on gold.Had posted the following about 16 days back.
In current environment , we find risk-reward favorable ( no investment is without risk).
It makes sense for people in India.
The logic is as following :
Gold price is closely linked to dollar-INR exchange ratio.We’re expecting that with falling DXY ,the international price ( US$/OZ) of gold may touch all time highs in coming year .
What if the opposite happens ?
DXY does not fall, then rupee may depreciate further thus making the gold (in INR) costlier.
So it might work in both scenarios – whether DXY falls or it rises.
Risk is that in India, gold price is inclusive of GST. In case government decided to lower the gst ,then it might impact it negatively ( a bit) .
In short term, keep in consideration that we’ve run a lot in last few weeks (5-7% movement in short period this kind of asset class is very fast) , hence it might correct or may consolidate in a narrow range for next few weeks.
Hope it helps.
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