Ultrarich bets big on gold

Mumbai: As much as six per cent of the total investable wealth of Indian ultra-high net-worth individuals (UHNWIs) was allocated towards gold in 2022, says Attitudes Survey which was recently conducted by realty consultancy Knight Frank

India and Chinese Mainland were positioned second on the list with a six per cent wealth allocation in gold by UHNWIs of the respective countries in 2022. Austria ranked first on the list with 8 per cent allocation. Gold allocation by the Indian ultra-wealthy individuals stood higher than the average allocation of UHNWIs from both global and APAC region.

According to the Knight Frank report, in 2022, the average UHNWI wealth allocation in gold was 3 per cent globally and 4 per cent in the Asia Pacific region.

Talking to Bizz Buzz, Shishir Baijal, Chairman & Managing Director, Knight Frank India said, “In the wake of uncertainties in the global economic landscape, consumers resorted to allocate incremental capital to assets that offer stability and serve as a hedge against inflation.” It was captured aptly in the Attitudes Survey in our The Wealth Report 2023 that Indian ultrarich people have allocated higher proportion of wealth to gold (6 per cent) versus the global allocation (3 per cent) in 2022, he said.

One of the primary reasons for the rise in the allocation to gold by UHNWIs is the significant returns that the yellow metal has provided over the years. Gold has delivered a stellar over 69 per cent returns in the past five years (From FY2019 to FY2023). The pandemic, resultant low interest rate and easy liquidity strategy adopted by the global central banks gave a massive push to the prices of gold, the report said.