Why should you increase gold allocation in your portfolio this Diwali

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Gold shopping on Diwali is not only a tradition but it is also considered auspicious. On this auspicious occasion, gold is purchased by Indians despite high prices. If you are an investor, then you should increase the gold stake in your portfolio. Analysts at Angel Broking say MCX Gold should be bought at a price of 44,500 to 45,500. According to the chart of MCX Gold, the prices of gold have increased about 30 percent this year. This year, the price of gold reached the maximum level of Rs 56191 per 10 grams and has also come down to the lowest level of Rs 38,400. The trend of long-term investment in gold is still positive.

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According to the World Gold Council, gold demand in India is expected to reach a 26-year low this year. Retail purchases of gold can be severely affected as gold prices reach record highs and people’s income is affected due to corona. Analysts expect investment demand by central banks worldwide to continue to increase in 2021. A report by Angel Broking says that the figures given by the World Gold Council do not give a good picture in India. Given the uncertainty in the global economy, investors should increase the share of gold in their portfolio to 10 to 15 percent.

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According to the World Gold Council, gold demand in India is expected to hit a 26-year low this year. Retail purchases of gold can be severely affected as gold prices hit record highs and people’s income is affected by the Corona crisis. According to Angel Broking, gold consumption in India in the first half of this year declined by 56 per cent to 165.6 tonnes in the previous year. Due to the lockdown, demand fell by 70 per cent to 63.7 tonnes in the June quarter. It is the lowest in more than a decade.

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The economy is continuously being affected due to the epidemic. This is negatively impacting consumer sentiment for jewelery and technology. On the other hand, investment demand through gold ETFs remains strong. According to the report, the gold ETF has crossed the 1000 ton mark for the first time. Thus, the record figure of 646 tonnes of 2009 has been left behind. Fundamental support for gold investment demand is not expected to change. As long as monetary policy remains soft, gold will remain bright.

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