Gold isn’t Popular as a Portfolio Diversifier, But is Worth a Glance

Shenzhen, China – August 28, 2018 – Investors usually shy away from gold, considering it as a non-productive asset. The conventional way is to blend stocks with bonds. There are however portfolios that include gold to diversify at least in the short term, and give it preference over cash due to limited supply.

An interesting but not very reliable set of studies reveals that gold can deliver good returns usually in the third quarter. This has been observed by looking into data, where the months of September and November stood out for rise in gold prices. Though gold and silver rise and fall together, these two months reveal a different behavior for gold. For investors, however, gold can be considered a less preferable way to diversify.

The most significant use of gold is in jewelry, rather than as an investment asset. The metal is specially prized during the wedding season in India, a major consumer of gold, and also in the holiday season in the fourth quarter. On the other hand, silver is usually influenced by pure industrial demand.

Some experts suggest that gold prices are about to enter a period of appreciation, though the average rise could be between 1-2% monthly, in case there is actually an increment. Caution is necessary here, since gold prices have declines in this period in the past, sometimes by over 5%.

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