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Gold and Silver Outlook: Should You Invest After a Year of Unprecedented Gains?

Gold and Silver Outlook: Should You Invest After a Year of Unprecedented Gains?

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Gold and Silver Prices Rise Since Diwali - Should you invest

Since Diwali 2023, both gold and silver prices have surged significantly. Gold has seen an increase of over 30%, rising from ₹60,282 to ₹78,577 per 10 grams. Similarly, silver prices have jumped by more than 23%. The surge in gold and silver prices over the past year is hardly surprising, given their status as safe-haven assets during times of conflict and uncertainty. The ongoing Israel-Gaza conflict and other geopolitical tensions, combined with the Federal Reserve’s shift towards easing monetary policy, have significantly boosted the value of these precious metals. Furthermore, the looming US presidential elections have added to financial market uncertainty, prompting more investors to turn to gold.

This article delves into the factors driving the prices of gold and silver. It further explores whether now is the right time to invest in these precious metals.


Silver has delivered double-digit growth: Should you invest in it?

Silver, valued both as a precious metal and an industrial commodity, is influenced by a mix of economic, geopolitical, and technological factors. Unlike gold, silver has widespread industrial uses, especially in electronics, solar panels, semiconductors and medical devices. As new technologies continue to develop, the demand for silver in these areas is likely to increase, potentially driving prices higher.

Just like gold, silver is also considered a safe haven. With the rising geopolitical tensions and uncertainty due to US elections silver prices have been on a northward trajectory. Additionally, silver’s value has also bolstered by the global demand from the electric vehicle (EV) sector and the increasing use of photovoltaic technologies in renewable energy.

With the stimulus package announced in China, one can expect a rise in the industrial demand for silver. Moreover, a good number of investors are favoring silver over gold due to its affordability. So overall, the long term view on silver is positive. However, it is a very volatile commodity, and investors should tread on it with caution. If you are looking to invest, silver ETFs are a great way to invest in this precious metal.


Outlook for gold: Should you invest in gold now?

Should the geopolitical tensions continue, or worse escalate, it would mean gold’s demand would continue to rise and it may see further uptick from current levels.

What is the outlook for gold until next Diwali? The price of gold is influenced by a confluence of unpredictable factors, making it challenging to forecast its performance for the next year—any prediction is essentially guesswork.. Unlike shares or bonds, gold doesn’t have a clear valuation marker. Whether gold is priced at ₹60,000 or ₹90,000 per 10 grams, its value is simply determined by the market

The issue with buying gold when it’s on an upward trend is that there’s little to support its price when the momentum shifts. Having said that, diversification is crucial for any investment portfolio. Adding gold as an asset class can help achieve this. This is particularly beneficial during market downturns, as gold prices often rise when other assets decline. Gold and silver exchange traded funds (ETFs) are great ways to add these precious metals to your portfolio and give it a boost of diversification.

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