Scenario Z. Z stands for Zimbabwe. What if the Fed fails to curb inflation and Zimbabwe-type hyperinflation takes hold? Unlikely, but that would be the gold aficionado’s dream-come-true scenario. Gold would once again soar.

Gold thrives in conditions of economic uncertainty and fear. It also does well when paper currency loses its value owing to inflation. For all those wishing to speculate in gold, changing inflationary and economic outlook are the key variables to watch. This, admittedly, is no mean task.

If you are a conservative investor, buy in dribbles till you reach the 4-8 per cent limit, and then hold gold in your portfolio till need or calamity (war, hyperinflation, economic or financial crisis) strikes. Then sell. u

sk.singh@expressindia.com