Gold near Rs 52,000. Does it make sense to invest now?

Gold prices soared to new record highs on Monday morning as investors sought safe haven due to the rising tension between the United States and China and the health of the global economy, which was destroyed by the COVID-19 pandemic. Gold future an all-time high of 51833 in the early morning. According to fund managers, the yellow metal is more likely to shine due to uncertainty in the world economy due to a coronavirus pandemic. Gold mutual funds achieved a staggering 43.16% performance in one year, outperforming all other asset classes and categories.

should you buy gold

While global uncertainty may preserve gold today, its impressive track record is a good argument for gold investments, fund managers say. Vikram Dhawan, head of commodities and director of the Nippon India Mutual Fund, says that solid gold history in the past decade makes it a good investment even at these levels. 

Gold has experienced much less depreciation in the past decade. Gold funds as an asset class have no default risk or credit risk. India's long-term inflation was 7-8% and gave gold the same return. Therefore, it has proven its value over the years, so we see purchases and flows, ”says Vikram Dhawan. 

Experts believe that until there is clarity about the spread of the pandemic and elections in the United States, gold will benefit from the doubt. Data indicates that in 2001 and 2008, gold was the first among asset classes to recover after the economic crisis. Mutual fund managers have tips for retail investors here. "In 2013, when gold reached its highest level of Rs 35,000 / 10 grams, investors who came at that time received some long-term returns. However, investors who wagered their bets received double-digit returns. My advice is to invest in Gold funds through SIP, "says Vikram Dhawan.

Dawan says that after the gold fund in 2001, it offered a 240% return and in 2008 it gave 170%. So there are a lot of things to cut back on the gold rally, but it is expected to be very volatile. "Don't go overboard, allocate 10-15% to gold funds or ETFs. If you have gold money, keep investing through SIP. If an asset class works well, you won't have to put all your money into it. Also, it's very important. Having money in the current scenario, don't play tactical bets in your contingency fund, "says Gaurav Monga, director of PXG Consultants.

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