InvestorQ : What was the reason for gold prices to jump so sharply by Rs.1800/10 grams in a single day on 24 February? What is so special about gold now?
Riya Dwivedi made post

What was the reason for gold prices to jump so sharply by Rs.1800/10 grams in a single day on 24 February? What is so special about gold now?

Answer
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rhea Babu answered.
7 months ago


Gold prices are normally reflective of a safe haven demand when the equity markets are looking too risky. If you look at gold historically, they have always moved contrary to equity markets. That is because equities are preferred when there is growth and gold is preferred when there is no growth or when the growth is negative. Gold in the international markets also got close to $1680/oz while the gold price in the Indian market touched a new peak of Rs.43,800/10 grams. This is clear example of panic buying as investors are willing to buy gold even at these elevated prices as they see gold as safer than equities. With the IMF warning about a downgrade in growth, the only option for most investors appears to be to increase their exposure to gold. That is exactly what investors appear to be doing in the global markets and also in the Indian markets.