Gold is an asset for buyers who prefer a safe-haven Investment, and due to significant global events affecting the world economy; its prices are dipping across the globe. In the UAE, prices of Gold have dropped, and people can now purchase it at Dh 208.75 per gram (21-Karat), Dh 218.75 per gram (22-Karat), Dh 232.50 (24-Karat) from Dh 234.50, and Dh 178.75 (18-Karat) respectively. Credible reports in the region have suggested there will be further shifts in the prices of gold from $1,965 and later $1,975 for an ounce into the price brackets of $ 1,910 to $1,1910 soon.
Kavan Choksi– an expert, speaks on whether one should start buying gold or not
Business and finance expert Kavan Choksi observes the fluctuations in the prices of gold are the result of the dollar index value that was close to a three-week high recently. This rise in the value of the US dollar had made gold expensive for people using other currencies. On the other hand, those who were holding dollars enjoyed the opportunities that arose from the increase in its value, and in the USA, the yields from bonds also attained a three-year high across the world.
The direct relationship between gold prices and bond yields
When the value of the dollar increases, so does the yield of bonds surges too. There exists a positive and direct relationship between the two. As mentioned above, many people consider gold to be a safe investment with lower risks when compared to other mediums of investment. Many as a low-risk investment prefer bonds, but one should note that their yields depend upon the dollar index. So, if a positive relationship between the two exists, people should be prepared for the negative relationship as well- when the value of the dollar drops, bond yields also reduce.
Tips for potential investors
Now, with the prices of gold dropping and the dollar index at a high, should people start investing in it? Experts in the field advise investors not to rush. The global economy is largely being impacted by certain world events. The supply of gas and oil has fallen due to the Russian-Ukraine way, and their prices have surged due to the sanctions imposed by Russia. As a result of the above, many people did rush to invest in gold, and this pushed its prices up.
When it comes to potential investments and financial planning, business expert Kavan Choksi advises that one should consult an expert in financial management first. It is difficult for you to predict market trends if you do not have sound knowledge of the economy, factors that impact inflation, the strength of the US dollar, and other significant factors that will affect your investments. Financial planning for individuals depends upon their own goals and risk portfolio.
With the guidance and advice of a Skilled Financial Advisor, one can make prudent choices for wealth building. Investments of any kind are always subject to market risks, so the intervention of an experienced and skilled financial advisor will guide you in this area to make the best choices for your future.
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