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    Thursday, March 9, 2017

    Journey of Gold through the Year 2016

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    Indians have always believed in gold being a good investment option. Attributing the high demand for the precious element to the Indian culture, gold never goes out of style. People are always lining up at jewellery stores irrespective of the price of gold. Has gold always been stable or does it fluctuate a lot? Here, we give you a lowdown on the fate of the metal in the past year, 2016.

    The year 2016 was a relatively good year for the valuable metal. According to the World Gold Council, despite the slight fluctuation during most of the year, gold was held its ground. Overall, it saw an increase in demand which resulted in a high for the third year. Although there was a decrease in the purchase of jewellery but the demand for coins and bars remained mostly stable. Towards the end of the year, due to the decrease in prices, the demand for coins and bars increased. This was especially the case in China. However, for most of the year the prices did not fall. Many people bought less jewellery and the year witnessed a fall in gold jewellery purchases. This was then followed by the sudden and surprising announcement of demonetisation in India. The demonetisation of lower denomination currency brought the country to a standstill. During the last quarter of the year, India sees a lot of festivals and weddings. This usually sees a boost in the purchase of gold jewellery but due to demonetisation, there was a sudden drop.

    Gold has maintained its position as being the safer investment among valuable metals. It has outperformed silver and other investment options even when the economy was down. Jewellery purchases witness fluctuations but the coins and especially bars remain a favourite among investors and buyers. Second to gold, silver also performed well but failed to match the strength of gold.

    Prediction for the gold market varies with every agency. 2016 was predicted as a year of surging gold prices but saw a drop during the end of the year. Changes in economic policies led to the unpredictable trend of gold. Economic, financial and environmental changes make it very difficult to predict the market for the entire year. Owing to this reason, the predictions for this year, 2017 are very different. Some predict gold to start out and stay strong while others foresee a bearish period, at least for the first half of the year.

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