New Delhi: Amid ongoing economic uncertainties, historical trends indicate that gold is likely to maintain its strategic significance in investment portfolios throughout 2025, as highlighted in a report by Aequitas Investments.
The report identifies the Gold-to-Equity ratio as a crucial indicator of this trend, demonstrating that gold tends to outperform equities during times of increased market volatility.
When this ratio falls to lower levels, historical patterns suggest a migration towards gold, often prompted by economic crises, inflationary pressures, or corrections in the stock market—factors that are particularly relevant in today's global environment.
As participation in equity markets reaches unprecedented levels, investors are increasingly recognizing gold as an essential diversification strategy to mitigate potential downturns, according to the report.
Furthermore, the report emphasizes that gold's resilience during uncertain times reinforces its role as a stabilizing element within investment portfolios.
It also notes that gold has traditionally acted as a reliable hedge against inflation, a pressing concern once again.
"The historical examination of the Gold-to-Equity ratio, along with risk-adjusted return metrics and inflationary trends, highlights gold's critical role as a strategic safeguard against financial instability," the report states.
With indications of a slowdown in the Indian economy and persistently high inflation, the demand for gold has significantly increased.
The report highlights a significant increase in the physical gold holdings of Indian gold ETFs, which have nearly doubled over the last four years, reaching an all-time high of 54.5 tonnes as of October 31, 2024.
Considering these developments, gold is positioned as an attractive investment option for 2025, offering stability and a safeguard against the uncertainties of the economic landscape, according to the report.
On Thursday, gold prices in India surged to Rs 88,285.00 for 10 grams of 24K. This consistent rise in gold prices indicates a growing interest among investors in the precious metal amidst fluctuations in the global market. Since early February, gold has shown a steady upward trajectory.
Several elements have driven the recent surge in gold prices. The prevailing global economic uncertainty, exacerbated by trade disputes and inflation worries, has led investors to gravitate towards safe-haven assets. Furthermore, the buying patterns of central banks, especially in China and India, have bolstered demand for gold.
