Daijiworld Media Network - New Delhi
New Delhi, Apr 30: A confluence of global economic anxieties, escalating geopolitical instability, and burgeoning fiscal deficits could propel gold prices to a staggering $3,300 per ounce in 2025. This optimistic forecast emerges from a newly released report highlighting a renewed investor appetite for gold as a secure haven, particularly amidst anticipated corrections in equity markets, according to Capitalmind Financial Services Private Limited.
The report underscores gold's established reputation as a robust and dependable asset for Indian investors over the long haul. Despite experiencing price fluctuations in global markets, gold has consistently generated positive returns when denominated in Indian rupees (INR). Notably, the study reveals that gold has never witnessed a negative decade in INR terms, contrasting with two decades of negative returns when measured in US dollars (USD).
Anoop Vijaykumar, head of research at Capitalmind, elucidates gold's dual nature, characterizing it as both a long-term store of value and a volatile asset susceptible to short-term price swings. However, for Indian investors, the persistent depreciation of the rupee against the dollar has rendered gold a comparatively safer investment avenue.
"While gold may not produce cash flows or exhibit the compounding potential of equities, its weak correlation with other asset classes makes it an indispensable component for portfolio diversification," Vijaykumar emphasized.
He further advises that the most prudent approach to incorporating gold into an investment portfolio is through systematic rebalancing. This involves periodically adjusting gold holdings as part of a well-defined long-term strategy, rather than making impulsive purchases driven by fear or the desire to avoid missing out on potential gains.
The Capitalmind report identifies several key catalysts fueling the recent upswing in gold prices. A significant factor has been the intensifying trade friction between the US and China. Imposition of substantial US tariffs on Chinese goods, coupled with retaliatory tariffs from China, has steered investors towards safe-haven assets like gold. Analysts attribute an $800 per ounce surge in gold prices in 2024, at least in part, to these trade tensions. Furthermore, the depreciation of the Chinese yuan has also contributed to heightened gold demand, the report concludes.