Why Allocating 10% to Gold is a Smart Move According to Angel One

MUMBAI: Angel One Ltd.’s research shows that Gold will continue to shine as a preferred asset class in 2024 and advises investors to increase exposure to 10% in their portfolio. The leading player in the fintech sector provides an exclusive outlook on the precious metal, thereby fortifying its position as a partner of choice in investors’ wealth-building journey.

Prathamesh Mallya, Deputy Vice President, Research, Non-Agri Commodities and Currencies, Angel One Ltd, commented “We, at Angel One, are committed to sharing advanced research for our investors to make informed decisions and stay ahead of the curve. Gold has always had a sentimental value in our Indian society. In times of global economic uncertainty, gold would provide the perfect hedging solution against both currency fluctuations as well as inflation. We firmly believe that this study would aid as a tool to the investors in their wealth creation journey, particularly in times of economic uncertainty.”

Some additional study findings which affirm the golden era for the yellow metal:

YTD as of 23rd August 2024, Spot Gold prices have moved up by around 22 percent and MCX gold futures have moved up by around 14 percent. The double-digit gains in gold prices in 2024 are a clear indication that precious metal as an asset class is in flavor for investors across the globe.

Historically, it has been observed that the key guiding principle behind the allocation of gold as a part of the central bank portfolio is constructed according to three guiding principles safety, liquidity, and return.

Global official gold reserves rose by a net 290t in the first quarter of 2024, the highest Q1 total in data series back to 2000; 1% higher than the previous Q1 record set in 2023 (286t) and 69% more than the five-year quarterly average (171t). The chart above clearly shows the interest of global central banks in their accumulation of gold in 2024.

The investment demand as seen in the net additions of ETF holdings also signals that gold will shine for a much longer time even if the pandemic is under control.

With double-digit gains already in the year 2024, the important event that will drive gold prices further higher will come out of a combination of events starting from interest rate cuts in the US and further interest rates trajectory in Japan along with the outcome of the US elections. Angel One has been at the forefront of research-backed advisory for its clients. In alignment with that vision, Angel One presents the outlook for gold for 2024. The chart structure of gold prices indicates further moves higher towards the $2800/ounce mark. Accumulation zones for gold stand at around $2300/ounce mark for long-term investors. Prices on the MCX can be accumulated at around Rs.68000/10 gms mark for a target higher towards Rs. 78000/10 gms mark by the end of 2024. With the global output to contract and the economies in a deeper recession than most anticipate, gold as an asset class is a safe bet for investors across the globe.

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