Should you buy gold amidst rising interest rates and economic uncertainty?

Finance experts suggest buying gold during this time.

Rise in Gold Price

US Fed Bank has been increasing the repo rate constantly amidst economic uncertainty. Many countries are stocking up their gold reserves, and financial analysts believe you should do so too. Gold is seen as a hedge against inflation as gold's value rises during an unstable economic condition. Many investors ask if the time is ripe to consider buying gold. Here is what the experts have to say:

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Founder of Stable Investor, Dev Ashish

Founder of Stable Investor, Dev Ashish, says chances are that gold price will continue to rise. He believes economies will witness mild-moderate recession and weak growth. Inflation will go down gradually but will still be high than before. Central banks are trying to fight inflation by hiking interest rates, and Dev Ashish believes that the rate increase will initially slow down and eventually stop by the latter half of 2023.

He believes the financial markets have been volatile the past year and expects them to remain the same in 2023. According to him, geopolitics will stay in the limelight. He says that gold is becoming desirable for many countries to reduce dependence on foreign reserves. He believes the outlook for gold is positive for the current year. He believes it will be in the uptrend throughout. Dev Ashish suggests having 5 to 15% gold in your long-term investment portfolio. It might be too low to have less than 5%, as it might not considerably impact the portfolio. More than 15% is also not a good bet, as gold is a hedge against inflation and not a primary asset for many investors. He suggests collecting gold in periods and not in one go. 

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Axis Securities, Head - Commodities, Pritam Patnaik

Patnaik said that history suggests that gold prices increase after large rate increase cycles, and he expects it to happen this time too. Bond yields are lower, and the dollar index has been collapsing. It seems like gold is the way to go. Also, crypto hasn't been much attractive. Larger economies are turning to gold, and buying on every dip is wise for any investor.

Financial experts expect gold to make a fresh high after the recession as there is a continuous hike in interest rates. Geopolitical issues are also a concern because of Russia-Ukraine and China-Taiwan. Gold looks like the best bet in these uncertain times. 

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice. You should separately obtain independent advice when making decisions in these areas.


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