Gold takes the crown as equities stumble on a shaky throne, shows data

Allocate 10-15% to gold, but don't expect last year's gains: Experts

With equity prices faltering, investors are flocking to gold, drawn by its role as a hedge against inflation and rupee depreciation. January saw a historic ₹3,751.42 crore in net inflows into gold exchange-traded funds (ETFs) from domestic mutual funds (MFs) — 4x the average inflow over the previous year.

 

The number of folios for gold ETFs surged 30 per cent to 6.5 million, while assets under management (AUM) jumped 87 per cent to ₹51,839 crore over the past year.

 

The sharp rise in the value of underlying assets has lifted AUM, with the net asset values of gold schemes rising an average of 40 per cent in the past year.

 

Gold prices are hovering near lifetime highs at around ₹84,700, while the BSE Sensex has dropped 12 per cent from its peak of almost 86,000 and is now trading at 75,939.

 

Investing in gold through ETFs is seen as a more convenient alternative to physical purchases. Domestic MFs now offer 18 gold ETF schemes.

 

While some may question whether it’s too late to join the gold rally, experts advise that gold should comprise 10-15 per cent of a portfolio. However, they caution that the returns of the past year are unlikely to be repeated. Geopolitical tensions, interest rate changes, and shifts in central bank demand will continue to shape gold prices.