 "Gold")
Gold is set to exceed returns delivered by the benchmark Nifty50 index for a second calendar year. So far this year, the precious metal is up 10 per cent, while the 50-share blue chip companies’ index is up 7 per cent.
This year, only the domestic smallcaps, mid-caps and US equities have fared better than gold. Last year, gold was the best-performing asset class with returns close to 15 per cent even as most domestic equity indices delivered less than 5 per cent. An analysis done by Axis Securities shows that gold has been among the top-four performers in the past six years, barring 2021 when it fell 4 per cent amid strong appetite for risky assets.
“Going forward, we believe gold will continue to have an edge over other asset classes. It will be seen as a tool to facilitate the flight to safety as the risk of a slowdown in the US market increases due to expectations that interest rates will remain higher for a longer period. Fundamentally, the price of gold is inversely related to bond yields, and any weakening in yields will continue to have a positive impact on its price. Given current macroeconomic developments, gold will continue to attract investment as a proven hedge against other asset classes until uncertainties surrounding the Russia-Ukraine and Middle-East conflict subside,” said a note by Axis Securities.
