Mumbai: Global uncertainty over Brexit and the US Fed going slow on hiking interest rates has led to higher gold and silver prices. The metals outpaced stocks in returns since the beginning of this year.
While gold and silver prices have given returns of 41 per cent the beginning of this year the Sensex has gained just 7.79 per cent. Gold and silver prices have risen by 22.29 per cent and 40.69 per cent respectively in 2016.
In value terms gold prices have risen to Rs 31,050 per 10 grams on August 12, from Rs 25,390 on December 31, 2015, while silver rose to Rs 46,850 per kg from Rs 33,300 per kg.
The last time that the stock markets had outperformed gold and silver for the third year in a row giving much better returns to investors was in 2014.
Dhananjay Sinha, head, institutional research, Emkay Global, said gold which was $1,050 per ounce in January, rose in February to around $1,250 after the US Fed chief Janet Yellen’s dovish statement on interest rate.
However the uncertainty following Britain’s vote to exit the European Union, the continuance of the central banks of their monetary easing policy and Ms Yellen’s sudden silence on interest rates, led to the prices of gold and silver jumping even further — almost 30 per cent since January.
The Sensex gained a mere 7.79 per cent. The 30-share Sensex had scaled to a one-year high of 28,289.96 points on August 9, 2016. It however has not touched its all-time high.
