Mumbai: Akshaya Tritiya is around the corner buying gold on this day is widely considered to be auspicious. Gold bought on this auspicious day 10-20 years ago has earned double-digit returns. But returns have diminished in recent years and the metal is no longer a hedge against inflation.

Many view the event as a good opportunity to invest their money. However, in terms of buying gold as an investment, the scenario has undergone a change with the annualised returns going down by more than half in the past 20 years. Over the last three years, gold has fetched a lower return of 4.68 per cent from 10.05 per cent earlier.

gold-returns

With the rising gold prices, the yellow metal is no longer considered a hedge against inflation along with the uptick in crude oil prices and global trade war pushing it further.
Rising gold prices and government measures to enforce compliance in the Indian jewellery industry are killing demand in the world’s second-largest bullion market at the start of the traditional festival season when buying usually explodes.

However, rising oil prices and geopolitical tensions could push up gold in 2018.