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Equities or Gold?

Gold Silver Reports — Equities or Gold? — In the tradeoff between equities and gold, investors have opted for stocks because of the ongoing bull run, but analysts expect them to return to the safety that gold offers.

Report for gold continues to remain strong and the price is unlikely to fall below ` 30,000 per 10 gm in the next 4 months, they said. They predict investors to flock to gold after taking profit in equity markets. The rally in Indian equity markets the NSE Nifty gained from 6,825 points in February to 8,744 on Tuesday ­­ has sought attention of investors who were not attracted to equities post the 2008 turmoil. It is likely to see investments in gold being diverted to stocks. On the other hand, gold has made a remarkable comeback this year, with prices hovering around $1,320 (`88,440) a troy ounce compared with $1,060 at the beginning of the year. Any drop in prices will attract buyers.

“In the Indian market, investors are waiting for a dip in prices before they invest in gold.Investors will start investing more if price of gold falls to `28,000 per 10 gm. As of now, equities are attracting more investments,“

Gold has come under pressure following speculation that the US central bank could go for a rate hike in September. Gold has been on a downside since August 19 and on Tuesday , it slipped nearly 0.5%. “Even if there is a Fed rate hike, the damage is likely to be seen equally in gold and Indian equities. In such a scenario, gold shares an inverse correlation with interest rates, as it fails to deliver assured returns in high interest rates regimes,“ said Neal Bhai, Skynet Trading Solutions.

Equities or Gold?

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