Should you buy gold now?

On November 7, gold prices hit yet another high. Should you invest or book profits?

The Reserve Bank of India(RBI) made headlines this week when it announced purchase of 200 tonnes of gold valued at Rs 31,490 crore from the International Monetary Fund (IMF). Though RBI said the purchase was done as part of its foreign exchange management operations, a lot of people suddenly took notice and wondered if it was a great time to buy gold.

RBI, like many central banks, is just trying to diversify its foreign exchange reserves, generally held in dollars, into gold. Most central banks around the world are not bullish on the dollar and this move is taken to hedge exposure from a sharp decline in the dollar. This is because gold is not just a commodity but also an alternate currency.

Text: Business Standard

Image courtesy: Reuters

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