'Glittering brighter than ever': Experts highlight strong demand for gold, silver & gold ETFs

Gold and silver are "glittering brighter than ever," attracting significant investor interest this year, not just as cultural symbols but increasingly as financial assets, experts say.

Sugandha Sachdeva, Founder of SS Wealth Street, told Business Today on Friday that gold has outperformed most other asset classes. "Traditionally, we have viewed gold as a consumption asset, but now it is a trusted financial investment," she said. Sachdeva noted a shift driven by millennials investing in gold through ETFs, mutual funds and digital platforms. "Investors are turning to gold, supported by strong inflows into gold ETFs. Several factors have fuelled this rally, including global geopolitical risks, monetary easing by the US Federal Reserve and trade tensions," she added.

Central bank purchases have also supported the rally. According to Sachdeva, central banks have been buying over 1,000 tonnes of gold annually for the past four years, up from 500–600 tonnes before 2022. "The trend reflects eroding confidence in the US dollar and a broader move towards a multipolar financial world," she explained, describing it as a structural shift likely to continue.

On silver, Sachdeva highlighted its dual role as both a monetary and industrial metal. "Silver is used in technologies like 5G, solar panels, and electric vehicles, making it a critical mineral. Its structural demand is expected to continue," she said. The expert projected gold prices at Rs 1,45,000–1,50,000 and silver at Rs 2,00,000–2,15,000 for the next year, noting that gold targets could be reached by the end of this year itself.

From the retail perspective, Suvankar Sen, MD and CEO of Senco Gold, said that while the value of gold sales is expected to rise 20–25 per cent, high prices may lead to lower volumes. "Consumers are increasing budgets, but not in proportion to price hikes, so lighter-weight jewellery is in demand," he said.

Chirag Mehta of Quantum AMC highlighted the surge in gold ETF investments. "This year alone, gold ETFs have seen inflows of around Rs 24,000 crore, including Rs 8,300 crore last month. This indicates growing acceptance of gold as an investment asset and ETFs as a preferred instrument," he said. Mehta emphasised that gold ETFs offer liquidity, purity assurance and portfolio diversification, making them increasingly popular among investors.