Gold prices in the country have increased by 10 percent on an annual basis in the first half of the year. According to the World Gold Council, central banks around the world have increased gold purchases and geopolitical tensions have also increased gold demand. Also, a change in monetary policy is expected from the US Fed Reserve. These are also positive signs for gold and due to this, gold prices have increased by 18 percent on an annual basis.
Demand increased due to reduction in import duty
Before Budget 2024, the demand for gold in India was quite sluggish. Especially, in the jewelry segment. Most of the gold buyers were wedding-related. The rest of the people were avoiding buying jewelry. But, Finance Minister Nirmala Sitharaman announced a reduction in the import duty on gold in the budget and this again increased the demand for gold across the country.
Reports from the India International Jewellery Show show that retailers have increased gold orders, especially in view of the upcoming festive and wedding season. In some cases, gold orders have broken records of the past several years. This shows that consumers’ interest in gold has increased again.
Is there still an opportunity to invest?
Along with jewellery, the purchase of bars and coins has increased. This shows that the demand for gold for investment has also increased. Actually, everyone from consumers to jewelers and investors wants to take advantage of the reduced prices of gold. The US central bank has indicated a cut in interest rates. This is also expected to increase the price of gold.
This year gold has given a return of about 22 percent. Considering geopolitical tensions, economic uncertainty and other factors, it is expected to rise further. You can consider investing in gold to diversify your portfolio and reduce risk. Ideally, 10-15 percent of your portfolio should be invested in gold.