MBA - Lovely Professional University | Finance | Financial Consulting | CA Intermediate | B.Com. (Hons.) - Delhi University | Xaverian | Options Trader
Gold prices are on the rise! 📈 Generally, there is an inverse relationship between gold and stocks, meaning that when stock prices go up, the price of gold tends to decrease, and vice versa. This is because gold is often seen as a safe asset that is used to hedge the market position. But it's interesting to see that the stock market is following the same sentiments, where the Nifty and Banknifty are on a bull run and nearing their all-time highs. There can be numerous reasons for the rise in gold prices. Here's a breakdown of my analysis: 👉 There is an ongoing economic slowdown in the Chinese market due to real estate and other reasons. As a result, both Chinese citizens and the government are investing in gold due to safety concerns. The Chinese Central Bank has continuously increased its gold reserves over the past 15 months, which has given strong support to the demand for gold. 👉 There are expectations in the market that the US Fed will lower interest rates this year. Normally, when interest rates fall, large investors move towards gold, which gives the asset a natural push. This could be a major reason for the recent rally in gold prices. 👉 Globally, due to the Russia-Ukraine War, Israel-Palestine, and the Red Sea Crisis, the world market has shaken up a little. In such challenging times, gold is looked up to as a reliable and safe asset. As a result, the demand for gold increases, which in turn elevates its price. #gold #investment #bullmarket #stockmarket #analysis
