Gold & Silver Price Prediction: Why Gold Prices are Rising | Dollar vs Rupee | Revanth Chalamala

Описание: Welcome to SocialPost Finance! In this insightful discussion, we sit down with certified wealth manager Revanth Chalamala to explore the driving factors behind the rising prices of gold and silver and the influence of the Dollar versus Rupee relationship.

Why is Gold Surging in India?

Revanth Chalamala explains that while gold prices are at an all-time high, the increase in India has been far more significant than in global markets. The primary cause for this disparity is the depreciation of the Indian Rupee (INR) against the US Dollar (USD).

• Rupee Depreciation Effect: Since gold is purchased in Dollars, the fluctuating exchange rate—which has moved from approximately ₹40 to ₹85–₹90 per Dollar—means that the average value of buying gold in India has become higher.

• Massive Returns Difference: This price parity difference has led to vastly different investment returns. Over roughly a 10-year period, a person who invested the equivalent of ₹1,00,000 in India saw returns of 402%, whereas a person investing the same amount in the USA saw returns of 268%. In the last year alone, gold returns in India reached 75%, compared to 63% in the global index.

• The Risk Factor: Investors should be mindful that if the Rupee strengthens (for instance, returning from ₹90 to ₹85 or ₹80), gold prices in India might not increase, even if the global value of gold is rising. Investing during short time frames (one or two years) when the Rupee is strengthening could result in losses.

The Outlook for Silver

Silver’s price is largely driven by demand, especially related to increasing sales and its use as a material component in electronic gadgets and EV cars. Although gold and silver movements generally have about a 75% correlation, silver has historically been more volatile. Silver can take longer than gold to break previous highs (for example, taking four years from 2016 to 2020 to reach a new peak).

• Fundamental Drivers: For gold, high central bank buying is a necessary fundamental activity that drives demand.

• Silver Investment Risk: A significant danger for silver investors is the risk of substitution. If silver becomes too expensive, companies looking to increase profits will seek cheaper alternative materials for use in EV cars and electronic gadgets, potentially leading to a drastic fall in silver demand.

Investment Strategy:

Due to volatility and substitution risks, investors are advised to approach silver cautiously. It is recommended that the combined allocation for both gold and silver should generally not exceed 10% of the overall portfolio.

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Gold & Silver Price Prediction: Why Gold Prices are Rising | Dollar vs Rupee | Revanth Chalamala
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