Use current prices to raise gold allocation to 10-15%, say analysts

Rising inflation, low real yield, and equity market volatility are positives for the yellow metal

The second wave of Covid-19 infections and the lockdowns being imposed across the country are adding to investors’ anxiety. Though these developments could delay economic recovery, they are likely to be positive for a safe-haven investment like gold. Already, the yellow metal has risen 6.2 per cent from its one-year low.

“The uncertainty on the pandemic front is back. New waves and variants of the virus, and the resulting lockdowns, could trigger pullbacks in risky assets like equities. Gold could benefit from the resulting risk aversion, as happened last year,” says Chirag Mehta, senior fund manager, alternative investments, Quantum Asset Management