Ultra-rich Indians are now parking more money in gold: Knight Frank survey

The rise in allocation in gold is mainly owed to the significant returns it has given in the past few years

As compared to 4 per cent in 2018, ultra-high net worth Indians allocated 6 per cent of their wealth in gold in 2022, a survey released on Friday showed. Globally, ultra-rich Indians allocate the second highest share of their wealth in gold, it added.

According to the Attitudes Survey conducted by real estate consultancy Knight Frank, the ultra-rich in Austria allocate the highest share of their income (8 per cent) towards gold. Indians and Chinese follow them at 6 per cent.

The rise in gold allocation is mainly due to the significant returns it has given in the past few years. Since 2018, the price of gold has jumped 80 per cent. The price of 10 grams of gold in Mumbai has risen from Rs 29,304 in 2018 to Rs 52,760 in 2023. 

"The pandemic, resultant low-interest rate and easy liquidity strategy adopted by the global central banks gave a massive push to the prices," the report said.

Gold allocation by the Indian ultra-wealthy individuals stood higher than the average allocation of UHNWIs from the global and Asia Pacific (APAC) regions. According to the report, in 2022, the average ultra-rich wealth allocation in gold was 3 per cent globally and 4 per cent in the APAC region.

"In the wake of uncertainties in the global economic landscape, consumers resorted to allocating incremental capital to assets that offer stability and serve as a hedge against inflation," said Shishir Baijal, chairman and managing director of Knight Frank India.

In countries like the United States of America (USA), South Korea, Italy and Ireland, only 1 per cent of the ultra-rich allocated their wealth towards gold in 2022. In the United Kingdom (UK) and Australia, it was 2 per cent.