New Delhi [India], May 25 (ANI): Even amid heightened interest in gold as a strategic hedge against market volatility and inflation, institutional investors are maintaining a cautious stance on increasing their exposure to the precious metal, according to a recent report by Liechtenstein-based investment and asset management firm Incrementum.
The analysis reveals that family offices—one of the key subsets of institutional investors—allocate only about one percent of their portfolios to gold and precious metals. This allocation places gold on equal footing with niche asset classes such as art, antiques, and infrastructure, and far behind more favored investments like private equity, real estate, and even cash holdings.
“Despite growing interest in gold as a strategic asset, institutional allocations remain strikingly low,” the Incrementum report noted. “Family offices allocate just one percent of their portfolios to gold and precious metals, placing it on par with art and antiques, as well as infrastructure, and well below allocations to private equity, real estate, or even cash.”
Gold prices saw a significant rally of nearly 25 percent between January and April 2025, largely driven by geopolitical uncertainty and trade tensions. However, prices have since begun to decline, reflecting a reduction in safe-haven demand following easing anxiety over global trade dynamics—particularly after a 90-day truce between the United States and China reduced fears of an escalating trade war.
While gold’s appeal surged earlier this year, driven in part by concerns over the Trump administration’s trade policies, the recent fall in prices signals a shift in market sentiment. Investment-related demand for gold soared 170 percent year-on-year in the first quarter of 2025, according to data from the World Gold Council (WGC). However, the momentum has since slowed.
In India, domestic gold prices have largely tracked global trends. As of Saturday, the price of gold rose again to ₹98,900 per 10 grams, a noticeable jump from ₹92,480 per 10 grams recorded on May 17, according to data from the Multi Commodity Exchange (MCX). The flat performance in Indian gold prices in recent weeks has been attributed to global price weakness and a mild appreciation of the Indian rupee against the U.S. dollar.
In volume terms, India’s gold imports have also declined on a sequential basis. The country imported $3.1 billion worth of gold in April, down from $4.5 billion in March, reflecting subdued demand for jewelry amid elevated prices.
Despite gold’s reputation as a stable store of value, the Incrementum report underscores that institutional capital remains largely on the sidelines, signaling ongoing skepticism about the long-term value proposition of the metal amid changing economic conditions. (ANI)
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