1 Jul 2022
Uncertain times, fear, and economic distress do not bode well for most asset classes. However, there are exceptions.
Gold is one such asset class.
In March 2020, when the intensity of the COVID-19 pandemic was starting to rise in India, Kotak Mahindra Mutual Fund mentioned that investors can consider investing in gold with a three to five-year perspective.
Since then, gold has generated returns of 18% from March to December in 2020 and a 4% fall in value in 2021. Between January to May 2022, gold has generated about 6% returns*.
Should investors consider investing in gold at current levels?
Nilesh Shah, Group President & Managing Director, Kotak Mahindra Asset Management Co. Ltd., thinks so.
China could be a big buyer of gold like Russia was before it invaded Ukraine. China could be looking to convert some part of its reserves to gold so that it can be frozen, he explained while discussing the monthly outlook for June.
Mr. Shah also said that as compared to the S&P 500 index in the US, gold looks fairly attractive*.
This, along with the potential buying from China and the current uncertainty in global markets, can make investors consider gold for the next three-five years, especially amid the Russia – Ukraine war and rising interest rates.
*Source: Bloomberg. Data as of 31st May 2022
This article is for information purposes only. The information provided herein is derived from public sources, believed to be from reliable sources. However, no representation or warranty, express or implied, is provided in relation to the fairness, accuracy, correctness, completeness or reliability of the information, opinions or conclusions expressed herein. Views expressed herein involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied herein. Kotak Mahindra Mutual Fund/ Kotak AMC is not indicating or guaranteeing returns on any investments. Past performance may or may not be sustained in future. Readers should seek professional advice before taking any investment-related decisions and alone shall be responsible for any decision taken.