Gold investment 'a sensible move'

A consultant in India has advised people who may be considering gold investment that they should take the plunge due to the prevailing economic conditions.

The Economic Times reports that certified financial planner and investment consultant D Sundararajan cites the fears of widespread inflation as a factor that cause gold prices to rise in the future.

He pointed out that crude oil prices, as well as diesel and cooking gas costs, could fuel inflation and reduce confidence in the economy.

"Review your investment portfolio in view of the high inflation rate and the possibility of a slowdown in economic activity and rework your asset allocation. It may be a good idea to reduce equity exposure in percentage terms by about five to ten per cent of your total portfolio and allocate that money to gold," he advised.

He added that gold and other commodity prices have fared better than stocks in recent months.

Gold buying increased in Europe last week after inflation fears drove the price higher, according to Standard Bank.

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