Is this the time to increase your allocation in gold-
时间:2024-06-28 23:38:51 阅读(143)
– By Amul Kumar Saha
Gold has been the world’s currency of choice from the time of ancient civilizations to the modern era. Gold is seen as one of the safest investments and as a hedge to help overcome economic inflation. Even as an asset that helps diversify holdings, it is a commodity that has held its value over the long term. Even when the S&P 500 Index was down 56.8 per cent during the 2007–2009 recession, the price of gold rose by 25.5 per cent. In the OND quarter of 2022, the price of gold has risen over 8.5 per cent. Typically, Indians have sentiments associated with gold and see it as a protector against bad times. As 2023 has just begun, it is a good time to reconsider one’s allocation towards gold.
Gold has been physically purchased in the form of jewelry, and coins but with the advent of improved technology, the purchase of digital gold, gold-based funds, and ETFs have picked up pace. Investors understand that during an economic recession when the money loses its purchasing power, the value of gold starts increasing. Rising inflation rates usually strike an increase in gold prices. During negative economic and geopolitical situations, it may be wise to allocate a good portion of the portfolio towards gold.
A Right investment option
It all depends on the resources and investment goals when it is about finding the most suitable gold investment for your portfolio. The price of gold has significantly increased over the past 50 years. It has been reported by Bloomberg that global central banks have been buying the most gold since the U.S. abandoned the gold standard in 1971. This pattern of allocation towards gold by the central banks has further gone up, over the last 3 years.
Investment opportunities in gold include bullion (gold bars), digital gold, mutual funds, futures, mining companies, and jewelry. In terms of volume, India, China, and the United States are large consumers of gold for jewelry. A chunk of demand is attributed to the use of gold in the manufacturing of medical devices like stents and precision electronics like GPS units.
Bullion, futures, and a handful of specialty funds provide direct investment (with a few exceptions) opportunities in gold. Other investments derive part of their value from other sources. If larger investors are fine with paying a premium and storage costs, they may opt to invest in gold bullion. If someone is looking for low-cost exposure with low minimum investments, then digital gold, ETFs and mutual funds that track the price of gold buying jewelry could be a way to own gold. According to a recent consumer data report by AxisMyIndia, Digital Gold is becoming a popular investment choice for consumers in Tier 1 and Tier 2 cities. Gen-Z and millennial investors who prefer investing in smaller amounts are seen adopting MMTC-PAMP’s digital gold which they can easily redeem in the form of gold coins and bars, later on.
The Current Scenario
The Chair of the Federal Reserve of the United States stated that the US central bank would continue to raise interest rates in 2023. Global numbers indicate that while US gold futures stayed unchanged at $1,824.70, the Spot gold was steady at $1,815.00 per ounce. Gold has outperformed the Sensex (up 6.7 per cent) with a year-to-date (YTD) return of 12.6 percent in 2022, raising consumer confidence around India and the United States.
Despite the global uncertainty around economic development, the rise in precious metal prices was restrained and it supported the US dollar index. However, one has to keep in mind the precarious global scenario owing to the possible resurgence of the COVID-19 virus.
Summing up
There are fair reasons to have an optimistic outlook for gold in 2023 as the demand from central banks rise. At present too, as per the World Gold Council, the year-to-date gold demand from central banks is at 673 tons, surpassing all annual totals since 1967. As anecdotal wisdom commands, this yellow metal will prove true on its nature of being a safe asset in times of turmoil. It is advised to diversify one’s gold holding.
(Amul Kumar Saha is the Chief Digital Officer at MMTC-PAMP)
上一篇:Reliance Industries shares gain on Q2 results; Should you buy, hold or sell RIL stock-
下一篇:Would Bill Gates be successful if he didn’t drop out of Harvard-
猜你喜欢
- uidance range. Ebit margins at 18.2% were down 140bps and missed estimates due to higher-than-expected employee costs. Profits at Rs 39.8 bn were up 11% y-o-y and were slightly ahead of estimates due to a $21m gain booked on the buyback of senior notes in Q4.
Services miss estimates; Software better than expected: Services business grew 0.6% q-o-q cc and missed HCLT’s Q3FY23 guidance, mainly due to a 3.8% q-o-q cc decline in the ER&D segment. Growth in the IT&BS segment moderated slightly to 1.6% q-o-qcc but was in line with estimates. BFSI and Life Sciences were the key growth drivers, while communications were the drag among verticals. Growth was led by the Americas region, while Europe and ROW posted declines.
Decline in bookings reflects delays in decision-making: HCLT won 10 large deals in services and three large deals in Software with net-new deal TCV of $2.1bn, down 8% y-o-y. Deal wins were driven by the services portfolio, were centered on cost optimisation and vendor consolidation and came mainly from BFSI, manufacturing and Life Sciences verticals. Management highlighted a ramp-down in discretionary spending in Hitech and communications verticals but pointed to a strong deal pipeline.
FY24 guidance in line with expectations: HCLT has guided for 6-8% y-o-y growth for overall business and 6.5-8.5% y-o-y cc growth in services segment and 18-19% margins in FY24—all in line with our assumptions. We maintain our FY24-25 cc revenue growth and margin estimates and expect HCLT to deliver 6.5% cc revenue growth and 18.4% margins in FY24. However, we lower our earnings forecasts by 2% to factor the higher tax rate indicated by the management.
Also read: MSME listing: How to migrate from NSE SME platform to main board? Check revised criteria
Raise PT: HCLT has fared better in Q4, particularly in North America and BFSI, unlike its peers. However, rising demand uncertainty as a US recession nears remains a concern. HCLT’s stock at CMP trades at 17x PE and offers a 5% yield, which in our view should limit downsides and derating. Hence, we raise our target PE to 17x (16x earlier) and raise our PT to Rs 1,125, offering 8% potential upside.
- 5 Nifty stocks to buy post Budget 2021; technical charts show strong gains as Nifty 50 eyes further upside
- ZEEL stock jumps 3% despite posting Rs 53 cr loss in Q1, NCLT decision eyed; should you buy or sell Zee Ent-
- Reliance, ITC, India Cement among top stock picks for Diwali; shares may rally up to 62%, check target price
- Revolutionising Antibiotics- Zosurabalpin’s potent defense against drug-resistant bacteria unveiled
- 52-week high, 52-week low- Coal India among 146 BSE stocks to hit 52-week high; Birla Tyres at fresh low
- Republic Day 2024- AAP slams BJP after Centre excludes Delhi, Punjab tableaus from R-Day parade
- RBI slaps monetary penalties on five co-op banks
- World’s largest white diamond – ‘The Rock’, goes up for auction; see stunning images