UHNWIs to Increase Their Gold Holdings This Year

The comments below are an edited and abridged synopsis of an article by SanGeetha G.

Indicating a growing appetite for gold among investors, more and more Indian ultra-high net-worth individuals are allocating a larger part of their investment portfolio to gold.  

UHNWIs to Increase Their Gold Holdings This Year | BullionBuzz
A macro image of three small gold bars with an orange ten Indian rupee bank note close up

As per a study by Knight Frank, 14% of Indian UHNWIs are likely to increase their investment in gold in 2019. That number was just 11% in 2018. More than half—57%—of these ultra-rich prefer to stay put with their gold allocation. Their number was lower (51%) in 2018. The number of UHNWIs who would decrease their allocation has come down to 6% from 14% in 2018. Overall, the sentiment is positive for a large majority of UHNWIs when it comes to investing in the yellow metal.

Several analysts maintain that gold will see considerable upside in 2019 amidst a lower global growth estimate and a lacklustre dollar. In the Indian market, gold is expected to touch new highs if the rupee remains subdued. The increased buying at current low levels has clearly lifted the investment demand of gold in the March quarter. 

The study finds that the situation is no different globally. Across key markets, 20% of survey respondents said that they intended to increase gold allocation in 2019 (11% in 2018). Another 40% will retain their gold allocation. In Asia, 25% want to increase gold compared to 19% last year, and 37% will maintain what they have.

“Globally, bullion led by gold has always been considered a safe investment, and in countries with cultural affinity towards the yellow metal, we are seeing a renewal of interest in remaining invested in this asset class. With the optimistic outlook towards investments in the asset class, on the auspicious occasion of Akshaya Tritiya, we expect a number of ultra-rich in India to purchase gold both for investment and consumption purposes,” said Shishir Baijal, CMD, Knight Frank India.

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