Fueled by geopolitical and economic uncertainties, gold demand is rising, with central banks increasing their reserves to hedge against currency volatility

With 30% YTD returns, gold continues to glitter brightly this year India's gold reserves surged by 343% between 2023 and 2024, positioning it among the top nations. While Indian investors favor gold, experts advise limiting allocation to 5-10% for optimal portfolio growth

Gold reserves in 2024 (tonne)

• Geopolitical, economic growth uncertainties leading to demand.
• Increased buying by global central banks as gold acts as a hedge against currency volatility and economic instability.
• India gold reserves grew by 343% between 2023 and 2024.
• India has the fifth largest gold reserves.

Gold vs equity (5-year return)

• Gold allocation should not be more than 5-10%.
• Over-allocation could dampen portfolio growth over the long term.
• Gold does not generate income like equities or bonds.

Asset allocation (%)

• Indian investors have a strong preference for gold.
• Their allocation to gold is 10 times compared to allocation by global households.
• Allocation to equity in Indian households is 50% visa-vis global allocation.

This story originally appeared on: India Times - Author:Faqs of Insurances