Investors May Consider Gold Allocation, Despite Near-Term Price Crunch

The second tranche of SGB is currently open and will close on 26th August, 2022.

SEATTLE (Scrap Monster): According to analysts and investment advisors, gold could be added to portfolios despite recent dip in the prices of the yellow metal. They suggest allocation of up to 10% for gold in their total investment portfolio. Also, they recommend subscribing to the latest tranche of sovereign gold bond (SGB), which is currently open for subscription. Gold could act as a good hedge in the midst of heightened inflationary environment, they noted.

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The second tranche of SGB is currently open and will close on 26^th August, 2022. According to Ministry press release, the issue price of the bond has been fixed at INR 5,147 per gram of gold. The customers who purchase the bonds online will receive a discount of INR 50 per gram of gold. The issue price is down by INR 106 per gram, upon comparison with the price of INR 5,041 per gram for the first tranche in June this year.

The analysts expect the gold prices to continue to remain range bound. The anticipated high inflation in the U.S. and Europe will support gold prices. According to analysts, gold could trade between INR 49,000 and INR 58,000 per ten grams over the next one year period. Incidentally, gold prices surged higher by 9.8% in the past one year in rupee terms, while it declined marginally by 1.6% in dollar terms.

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