Investing in gold will save you from the effect of rising inflation, know what should be the investment strategy


Gold has risen 9 percent in dollar value from its low levels of 2021. At the same time, gold has increased by 15 percent in the value of the rupee from its low levels in 2021.

Amid rising inflation, gold (GoldIn view of the slowdown in returns, common investors are now thinking many times about investing money in the precious metal. Gold has seen a decline from its upper levels. Whereas worldwide inflation (inflation) is at its upper levels. In such a situation, if gold gives limited returns, then due to inflation, this return (Return) can also turn into a loss. This apprehension is forcing investors to think again and again about whether they should invest money in gold or not. However, on the other hand, market experts are sure that gold remains a profitable deal for investors. According to experts, even though there may be volatility in gold, it has been successful in eliminating the effect of inflation in the long term.

It is better to invest in gold in the long term

According to the article given in Moneycontrol, gold remains a better investment option. Even if due to inflation, investment in other investment options is becoming a loss deal. According to the data, gold has increased by 9 percent from its low levels of 2021 in the value of the dollar. At the same time, gold has increased by 15 percent in the value of the rupee from its low levels in 2021. On the other hand, if we look at the performance of gold with inflation, then the increase in gold between January 2020 and January 2022 has been more than the increase in inflation in any case. That is, gold has eliminated the effect of inflation. On the other hand, if we look at the performance of gold between 2010 and 2022, except for some time, gold has left behind the effect of inflation for the rest of the time. Investing in gold gives protection from inflation.

Reserve Bank also trusts in gold

At the same time, the Reserve Bank’s report said that gold is a special asset having the properties of financial assets, which provides the advantage of diversification in investment. On the one hand, it helps in reducing losses at the time of a market downturn. At the same time, holding for a long period also gives good returns. The report said that gold has given positive returns over the long term and these returns have been better than other major asset classes. At the same time, the report said that in the past few decades, studies on the performance of equities, credit, realty, and gold and the effect of dollar movement on them have shown that investing in gold is becoming safer than before. And compared to other assets, the movement of gold has been better before the economic crisis and in the middle of the crisis.

What is an investment strategy?

Axis Bank advises not to keep your entire investment in one asset and invest in different assets depending on your goals. The bank advises investing 15 percent of your total investment in gold in the long term. At the same time, in the short term, this share can be kept up to 5 percent. According to the bank, gold is a safe option in uncertainty. On the other hand, it is much easier to get a loan or cash on gold than against shares or security. That’s why you should keep gold in your portfolio. However, returns on gold are limited as compared to stocks, so it is advisable to put only a small part of the investment in it.