After the outbreak of COVID-19, gold prices have climbed up to 28%. Global markets have seen a jump in gold prices by 23% due to the fears of inflation due to pandemic measures. Analysts believe that the yellow metal will continue to be in focus for the investors.
During the first two months of 2020, gold had posted a marginal gain due to economic slowdown. A sharp turn in global monetary policies and low interest rates from Mid-19, gave a boost to the gold prices. After the global breakout of COVID- 19 in march 2020, a major uptick was seen in gold prices. In August 2020, gold had hit an all-time high on MCX.
In 2021, gold is likely to glitter more and it is even expected that the metal can break all the records. This is the reason the gold market will be a boon for investors in 2021.
For this reason it is important to focus on gold tips to make huge profits in the yellow market. Here are some of the recommendations that will help you to decide if you should invest in gold market in 2021 -
#1. Gold is A Reliable Store of Value
Gold is considered as a safe haven for investment. Also the physical properties of gold have long been considered as a reliable store of value. Gold is widely available enough to trade but at the same time it has finite supply, so it is considered as valuable metal.
The prices of gold that are usually in dollars move in the opposite direction and if U.S. currency gains value then it takes a few dollars to purchase gold. This was one of the major reasons for the downfall of gold prices in the year 2020.
#2. Gold is Considered As a Hedge Against Inflation
When the entire world is moving towards uncertain economic conditions, gold is one of the good investment options to hedge against the future uncertainty.
With the dollar constantly weakening, gold prices are rising consistently. During these hard times due to inflation, gold becomes a more sound investment than any other investment options.
#3. Insurance Against Hard Times
During an economic slowdown, the stock market remains quite volatile and uncertain. The present situation has increased geopolitical tensions between various countries. Future of various big business organisations remains uncertain, making investment in the stock market quite risky.
At such times, gold holds its value even when the financial hard times hit. There is quite stability seen in gold prices even in geopolitical tensions. People tend to seek shelter when world power collides. During such times gold investment generally outperforms other investment options.
But at the same time we recommend you to subscribe to gold signals in order to invest in the market at the right time.
#4. Diversification of Portfolio
One essential feature in developing a strong feature is risk management. This becomes particularly important in such unprecedented times when stock markets are constantly crashing.
Wise investors add securities with a negative correlation to their portfolio. Such securities move in completely opposite directions. Gold, with its negative correlation to the stock market and currency values, provides a vital way to lower your overall risk of investment.
Gold tips play a huge role in reducing the risk of your investment and ensuring that you are earning maximum returns from investment.
We hope these reasons are sufficient to back up your gold investment decision. Also you need to pay attention to gold signals in order to ensure that your investment is secure.