Gold prices hit fresh high as retail investors push demand amid global uncertainties
As the US reciprocal tariff deadline looms, gold prices on Monday hit a record high of $3,106 per ounce for the first time
- MUMBAI — As the US reciprocal tariff deadline looms, gold prices on Monday
hit a record high of $3,106 per ounce for the first time, with people rushing
towards accumulating the safe-haven asset amid global uncertainties.
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- The yellow metal has gained more than 18 per cent this
year as retail investors continue to drive demand. Goldman Sachs, Bank of
America, and UBS have raised their price targets for gold this month.
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- According to a report by BofA Global Research, the
bullion is likely to reach $3,500 per ounce in the next 18 months if
non-commercial purchases increase by 10 per cent.
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- "Gold could potentially reach USD3,500/oz over the
coming 18 months, if non-commercial purchases increase by 10 per cent," it
said in a note, adding that central banks around the world could increase their
gold holdings to over 30 per cent from the current 10 per cent (on average) to
make their portfolios more efficient.
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- Gold emerged as one of the top-performing asset classes
in India in 2024, with a remarkable 21 per cent return year-on-year (YoY). The
Indian market has shown a strong investment interest in gold, driven by record
inflows into gold ETFs.
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- In 2024, Indian gold ETFs saw net inflows of Rs 112
billion, adding 15 tonnes to their holdings, which reached 57.8 tonnes by the
end of the year, according to Motilal Oswal Private Wealth.
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- The Reserve Bank of India (RBI) also continued its trend
of gold accumulation, adding 72.6 tonnes of gold to its reserves in 2024,
bringing its total reserves to 876 tonnes. This marks the seventh consecutive
year the RBI has been a net buyer of gold. Gold now constitutes 10.6 per cent
of the RBI's foreign exchange reserves.
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- While high prices affected jewellery demand, the
investment demand for physical gold, especially bars and coins, remained
strong.
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- While gold can serve as a long-term strategic asset in
portfolios, silver is recommended for more tactical allocations, said experts.
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