Gold prices are rising. How high will it climb?

Gold prices have already reached Rs 75,000. To what extent can we expect it to go up from here? - Prem

It is not possible to comment with certainty on how far gold prices will climb. This stands true for almost all asset classes.

While gold has shown promising short-term performance, with a return of about 20 per cent over the past year, its long-term returns are less impressive. Over a decade, gold has returned around 8 per cent, a figure that pales in comparison to other asset classes such as equities (Sensex), which has returned over 12 per cent in the same period.

Gold is suitable as a store of value. It performs well when the market is uncertain or fearful. But if we consider its long-term returns, it may not be a great wealth-builder. If you still want to invest in gold, we'd suggest investing in sovereign gold bonds (SGBs). Read all about it here.

Also read: Gold outshines equity and debt in 2022

This article was originally published on April 29, 2024.