GOLD REMAINS A SAFE BET

WHILE THE YIELD MAY NOT BE AS HIGH AS 2024, INVESTORS CAN STILL EXPECT MODEST GROWTH.

- BY RAJIV RANJAN SINGH

W HILE IT HAD taken the concerted efforts of De Beers and advertising agency N.W. Ayer & Son to make people believe that ‘A Diamond is Forever’, gold never needed a champion. From the lores about the mystical city of El Dorado, the legend of King Midas, to the chronicles of magical alchemy for turning lead into gold, the yellow metal has been mankind’s most coveted means to wealth since time immemorial, the most steadfast and resilient of all financial assets.

In fact, in 2024, gold is poised to have its best annual performance in more than a decade—up 30% year-todate in U.S. dollar terms and 22% YTD in rupee terms. The inflation-adjusted return of gold in 2024 has been more than the 1980s, says Sachin Jain, regional CEO, India, World Gold Council (WGC). In the same duration, the Nifty yielded just 13.39%, way lower than returns on the yellow metal.

In the last five years, this is the third year when the S&P 500 lagged gold returns. Coincidently, the Nifty50 returns were also less than that of gold during the same years.

The last time the S&P 500 lagged gold returns was in 2022 when the index had closed the year in the negative, says Jain. Prior to that, S&P trailed gold in 2020. Rising market volatility and geopolitical risks have been among the major factors in the remarkable performance of gold in 2024.