Gold Investment: Why Is Yellow Metal Seen As A Safe Haven In Uncertain Times? Explained

Gold prices are soaring amid US-China trade tensions and recession fears. Central banks are hoarding gold, with experts predicting further increases by 2025. Gold Investment: Amid rising macroeconomic uncertainty and escalating trade tensions between China and the United States, driven by Donald Trump’s new tariffs, gold prices are continuously reaching new highs.

Central banks are increasingly hoarding gold as the trade war intensifies and fears of a US recession peak. Goldman Sachs and UBS Group AG believe that the value of gold remains strong and expect prices to increase further by 2025 due to its role as a hedge against recession and geopolitical risks, along with stronger-than-expected central bank demand. Gold prices saw a sharp spike after the escalation of the tariff war.



In India, gold jumped over Rs 5,000 in less than a week, marking sharp buying interest among investors. It crossed the Rs 95,000 mark for 10 grams in the 24-carat category. Why Is Gold Seen As A Hedge In Volatile Times? Gold is a store of value, especially when economic or geopolitical uncertainties arise, says Aksha Kamboj, Vice President, Indian Bullion and Jewellers Association (IBJA) and Executive Chairperson of Aspect Global Ventures.

“When equity markets turn volatile or currencies fluctuate, gold tends to retain its worth, offering a hedge against inflation and a sense of stability," she adds. Why Did then Gold ETFs Inflow Drop In March? Despite a minimal outflow of investors from Gold ETFs in March, according to a report by the Association of Mutual Funds of India (AMFI), gold’s shine remains as strong as ever. Kamboj links the dipping of Gold ETF inflows in March with a broader behavioural trend, adding that many Indian investors still prefer holding physical gold or sovereign gold bonds over financial instruments like ETFs.

“It is very natural that investors keep themselves away from ETF investments when prices are at a peak and instead opt for withdrawal," she adds. In India, Kamboj states, gold holds emotional and cultural significance, which strengthens its appeal in uncertain times. Whether through jewellery, coins, or digital forms, gold continues to be the asset people turn to when the road ahead seems unclear.

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