UHNWIs to increase gold holdings this year

Chennai: 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.   

As per a study, 14 per cent of Indian UHNWIs are likely to increase their investment in gold in 2019. Their number was just 11 per cent in 2018, finds Knight Frank. Further, more than half- 57 per cent- of these ultra-rich prefer to stay put with their gold allocation. Their number too was lower at 51 per cent in 2018. On the other hand, the number of UHNWIs who would decrease their allocation has come down to 6 per cent from 14 per cent in 2018. Overall, the sentiment is positive for a large majority of UHNWIs when it comes to investing in the yellow metal.

Several analysts have been maintaining 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 rupee tends to remain subdued. The increased buying at current low levels has clearly lifted the investment demand of gold in March quarter.  

Knight Frank study finds that the situation is no different globally. Across the key markets, 20 per cent of survey respondents said that they intended to increase allocation to gold in 2019, against 11 per cent in 2018. Another 40 per cent will retain their gold allocation. In Asia 25 per cent want to increase gold compared to 19 per cent last year and 37 per cent 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 ultra-rich in India to purchase gold both for investment and consumption purpose,” said Shishir Baijal, CMD, Knight Frank India.