Veteran investor Mark Mobius believes that gold is mainly a safeguard in the event of severe circumstances and does not qualify as an investment since it does not generate interest or dividends.

What Happened? Mobius’ take on gold posted on Twitter on Monday comes around the same time as a Bloomberg report, which reveals that a recent surge in gold prices to an unprecedented high in India is discouraging local buyers ahead of a crucial demand period next month.

According to figures provided by the World Gold Council cited by Bloomberg, last week saw gold futures in the country soar to a record-breaking ₹60,455 per 10 grams. Over the past year, the metal’s value in India has increased by approximately 15%, attributed to both to the depreciation of the Rupee and the asset’s demand as a haven.

See also: Mark Mobius Says ‘Richest, Untapped Opportunity’ Of Investing Lies In India

Why It Matters? “If prices steady around current levels, demand may return for the key buying day of Akshaya Tritiya in April, but continued volatility will force people to stay away,” said P.R. Somasundaram, regional chief executive officer for India at World Gold Council, speaking to reporters in a Bloomberg Television interview.

As India relies on imports for nearly all of its gold supply, primarily from Switzerland and the UAE, fluctuations in exchange rates can significantly impact the domestic price of gold reveals the report. Smuggling is also becoming an attractive option due to a combination of record-high local prices and steep import taxes.

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