Should you invest in gold after the RBIs repo rate hike? Expert views on investing in gold

Invest in gold after RBI interest rate hike

Why should you  invest in gold after the RBIs repo rate hike

After a month of waiting, RBI has announced a repo rate hike of 50 bps. The prolonged discussion about inflation burning the economy has made the central bank take a more pronounced move. Today we will discuss why it is the time to invest in gold.

RBI Governor, Mr Shantikanta Das, announced a 50 bps point hike in repo rate to 4.90% last week. We all have seen how the market has performed right after the COVID-19 crash. It is the second consecutive month RBI has announced the rate hike. 

Since the decision came out, sentiments in the equity market turned bearish. To control inflation, RBI can further take decisions for rate hikes.

So to help you with your investment strategy, we will discuss today why gold is the best investment option after RBI's rate hike decisions.

Hedging Option - 

For those who don't know about hedging, it is an investment strategy that helps cover up the risk. When inflation is high, gold prices go against the value of the currency. Over the last decade, gold has performed better than the equity market.

If you see the past data, you will find that during inflation, gold always generated better returns than other investment options.

A Liquid Asset -

Unlike other investment options, gold is a liquid asset that can be converted into cash in no time. You can visit any jewelry store and can get your gold converted into hard cash. It isn't the case with equity investments where you need to wait till the settlement period to get the amount credited into your account.

Against the commentaries - 

The world is finding it difficult to get a way out of the slowdown. As per the predictions and analysis from some of the investment firms across the world, they see a major correction in the Indian stock market.

Since the beginning of April, Nifty50 is down almost 14%. But this yellow metal remained unaffected by the chaos. Because of the market conditions and no greater hope for revival, it is the best time to invest in gold.

Read our article on why experts suggest investing in gold in 2022.

Gold provides diversity -

Presently, gold is one of the best investment options to diversify your portfolio. Since equity and other commodities look risky currently on account of several geopolitical tensions across the globe, gold, on the other hand, can be the kickoff factor in your portfolio.

Also read : our article on how to invest in gold ETFs.

Conclusion 

In this, we have discussed a few factors why this is the best time to invest in gold after the interest rate hike can be a fruitful decision. Amid concerns over the world, you should allocate a proportion of your investment in gold. 

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