Gold Prices Reach New Heights as Retail Demand Surges Amid Global Turmoil
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Synopsis
As the US reciprocal tariff deadline approaches, gold prices have reached a historic peak of $3,106 per ounce, driven by retail investors seeking safe-haven assets amid global uncertainties. Experts predict the potential for further increases in gold prices in the coming months.
Key Takeaways
- Gold prices hit $3,106 per ounce for the first time.
- 18 percent increase in gold value this year.
- Predictions of gold reaching $3,500 in 18 months.
- Indian gold ETFs saw Rs 112 billion in inflows.
- The RBI added 72.6 tonnes to its gold reserves.
Mumbai, March 31 (NationPress) With the impending US reciprocal tariff deadline, gold prices surged to a historic peak of $3,106 per ounce for the first time on Monday, as investors flocked to this safe-haven asset amid ongoing global uncertainties.
This precious metal has appreciated over 18 percent this year, primarily driven by retail investors. Financial giants like Goldman Sachs, Bank of America, and UBS have recently updated their gold price forecasts.
A report from BofA Global Research suggests that if non-commercial purchases rise by 10 percent, gold could potentially reach $3,500 per ounce within the next 18 months.
"Gold could potentially reach USD3,500/oz over the coming 18 months, if non-commercial purchases increase by 10 percent," the report stated, emphasizing that central banks worldwide may augment their gold reserves from an average of 10 percent to over 30 percent to enhance portfolio efficiency.
Gold has emerged as one of the leading asset classes in India in 2024, boasting an impressive 21 percent year-on-year (YoY) return. The Indian market has demonstrated robust investment interest in gold, with record inflows into gold ETFs.
In 2024, Indian gold ETFs experienced net inflows of Rs 112 billion, adding 15 tonnes to their holdings, which totaled 57.8 tonnes by year-end, as reported by Motilal Oswal Private Wealth.
The Reserve Bank of India (RBI) has also maintained its gold accumulation strategy, increasing its reserves by 72.6 tonnes in 2024, raising the total to 876 tonnes. This marks the seventh consecutive year the RBI has been a net buyer of gold, now constituting 10.6 percent of its foreign exchange reserves.
Although high prices have impacted jewelry demand, the appetite for physical gold, particularly bars and coins, remains robust.
Experts suggest that while gold can be a long-term strategic asset in portfolios, silver is more suited for tactical allocations.
