Gilt-edged investment. Wealthy investors boost allocation for gold

Ultra-high net-worth individual investors have made higher allocations towards gold.

UHNWIs parked six per cent of their investable wealth in gold last year against 4 per cent in 2018, according to the Attitudes Survey conducted by Knight Frank.

India and the Chinese Mainland were positioned second on the list, with 6 per cent wealth allocation.

Austria was ranked first on the list with 8 per cent allocation.

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Gold allocation by Indian ultra-wealthy individuals stood higher than the average allocation of UHNWIs from both the global and APAC regions. According to the Knight Frank report, in 2022, the average UHNWI’s wealth allocation in gold was 3 per cent globally and 4 per cent in the Asia-Pacific region, it said.

One of the primary reasons for the rise in allocation was the significant return that gold has provided over the years. The yellow metal has delivered over 69 per cent returns in the past five years till FY’23.

The pandemic, resultant low interest rates, and easy liquidity strategy adopted by global central banks have given a massive push to prices.

Shishir Baijal, Chairman and Managing Director, Knight Frank India, said in the wake of uncertainties in the global economic landscape, consumers have resorted to allocating incremental capital to assets that offer stability and serve as a hedge against inflation.

Indian UHNWIs have allocated higher proportion of wealth to gold of six per cent against the global allocation of 3 per cent in 2022, he added.

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