Udaipur, March 18, 2025 – Domestic demand for gold is currently seeing a decline because of the continued rise in prices of the yellow metal. In India, the price of 10 grams of 24 carat gold has crossed Rs 90,000, and international prices have reached a record high of $3,000 per ounce. With the onset of the wedding season, the jewellery industry is concerned about whether consumers will come at these high prices.

According to business analysts, the lower and middle classes are the largest buyers of gold in terms of volume but the current high prices is keeping gold out of their reach. A survey by the Indian Gold Policy Centre at IIM Ahmedabad shows that 56% of gold buyers have an annual income between Rs 2 lakh and Rs 10 lakh. Since 2022, the price of gold has doubled, but the savings of this income group have not increased. This has reduced their ability to purchase gold.

According to market experts, investors have moved towards gold as a safe haven commodity on the back of fears about inflation, US trade policy and global economic instability. Analysts believe that gold prices may continue to rise in the upcoming months owing to the continued geopolitical concerns.

Gold has recently shown stronger returns than equities in the past 20 years. According to data, only 11% of stocks in the S&P 500 index have managed to outperform gold. This was driven by trade tensions, inflation concerns and central bank purchases. However, when compared to equities, gold has limited long-term outperformance as proven historically. This is the reason why investors are advised to maintain a balanced portfolio by including 20% gold in a portfolio which has reduced risk (standard deviation) and increased returns.

With Media Inputs