MUMBAI: Gold has always been a cherished and trusted metal, particularly favored by women for adornment. Its allure remains strong, even as prices reach new highs. Recently, gold hit a record $2,434 an ounce in late April, closing at $2,419.80 this past Saturday. This marks an increase of over $34 in a single day and a rally of more than 40% since October 2022, following the Russian invasion of Ukraine in February that year.
In India, gold has traditionally been the preferred choice for storing wealth, even before the rise of stocks, mutual funds, and other financial instruments. It is considered a safe haven asset, providing liquidity and a hedge against inflation and financial uncertainties. Over time, the trend has shifted from physically owning gold in the form of jewelry, coins, or bars to investing in dematerialized forms such as sovereign gold bonds, digital gold, and gold exchange-traded funds, especially as prices continue to rise.
What’s Driving This Demand
Gold prices have seen a significant increase recently. In just the past two months, gold prices have risen from ₹60,373 per 10 grams (₹6,037 per gram) on April 19, 2023, to ₹75,550 per 10 grams (₹7,555 per gram) on May 19, 2024. This popular household asset has tripled in value over the past nine years. Industry experts believe that gold could potentially triple again and surpass the ₹2-lakh mark in the coming years.