Relevance of gold as asset class to rise in coming years: Chief Economic Advisor Nageswaran

Chief Economic Advisor predicts gold's importance will rise as a portfolio diversification mechanism amidst economic uncertainties and debt challenges.

“Gold will remain relevant for investors as a portfolio diversification mechanism with a “likely ascending importance” as an asset class in the coming years,” Chief Economic Advisor V. Anantha Nageswaran said on Monday (March 3, 2025.)

Speaking at the IGPC-IIMA annual gold and gold markets conference 2025, he said gold will remain relevant not only as a store of value, as an ornament for cultural and religious purposes, but also as an important portfolio diversification mechanism "until such a time the world is able to arrive at an international monetary system from the current international monetary non-system".

"That day of reckoning is very difficult for any one of us to prophecy at this stage," Mr. Nageswaran said.

The value of gold has increased by more $200 per ounce or 8% in the last three months to $2,860 per ounce. At the same time, the Indian stock markets have fallen more than 8% over the last three months.

Since 2002, the value of the precious yellow metal is up 10 times when it was about $250-290/ounce. In the Indian market, the price of gold per 10 gm stood at around ₹85,000. India is a net importer of gold.

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He said it is very important to remember the relevance and the importance of gold for a portfolio, a store of value etc, more so against the backdrop of the likely ascending importance of gold in the coming years.