As economies around the globe slip into recession, gold is taking the centre stage. Somasundaram PR, managing director, India, World Gold Council, tells us how investors should read the economic and monetary cues that will have an impact on gold and how they can translate them into their investment decisions. How will the current environment affect gold as an asset class? Income contraction amid higher gold prices leading to a prolonged period of low consumer demand will affect gold.
In India, we could also consider an optimistic scenario where a credible set of reforms are rolled out after the crisis, a la 1991, and the second half of FY21 could see a big step-up in economic growth, with a positive rub-off on gold demand.