Gold demand set to remain resilient ahead of Akshaya Tritiya; Bullion remains preferred safe-haven for wealth creation

NEW DELHI: Gold demand and consumer sentiment remain firm ahead of Akshaya Tritiya on Sunday, April 19, as retail investors look to bullion as a preferred avenue for wealth creation. Despite elevated price levels, the festival continues to serve as a primary driver for the precious metals market, supported by a year where gold delivered gains exceeding 60 per cent.

Experts indicated that while the volume of jewellery purchases may stay moderate, the overall value of demand remains strong due to the metal’s role as a hedge against global uncertainties. Sachin Jain, Regional CEO, India, World Gold Council, noted that the festival remains a significant occasion for purchases, symbolising prosperity and long-term value.

“Akshaya Tritiya is the second-largest gold-buying festival in India and continues to be a significant occasion for gold purchases, symbolising prosperity and long-term value. While price movements earlier this year led to some cautious sentiment, demand fundamentals remain resilient, with gold prices up around 14-16 per cent year-to-date. Recent geopolitical tensions have driven intermittent volatility, reinforcing gold’s safe-haven appeal”, Jain said.

The market also sees a shift in consumer behavior as younger buyers gravitate towards lightweight and contemporary jewellery. Jain explained that while traditional demand remains, there is an increasing preference for 22k and 18k options alongside digital gold and gold ETFs.

“However, prices have seen phases of stability and mild correction, offering a balanced entry point for retail consumers, with an upward trend expected towards the end of April. We are seeing consumers continue to support traditional jewellery demand, while younger buyers are increasingly gravitating towards lightweight, contemporary 22k and 18k gold jewellery as both an aspirational and accessible investment choice. We are also expecting continued growth in digital gold and gold ETFs, reflecting evolving investment preferences. Overall, we anticipate positive momentum in gold buying this Akshaya Tritiya”, Jain added.

A report from Kotak Neo Research stated that investment-oriented products like coins and small bars see strong traction. This reflects a gradual evolution in consumption patterns in India, moving towards investing rather than merely holding physical gold for ornamental purposes.

The report stated that gold demand is expected to remain firm in value terms, although jewellery volumes may stay moderate due to elevated prices. “Investment-oriented products such as coins and small bars are likely to see strong traction, continuing the shift toward practical and liquidity-friendly formats”, the report noted.

India’s deep-rooted affinity for gold remains intact, with consumption patterns gradually evolving towards investing rather than holding the physical gold. The broader outlook for bullion remains supported by central bank diversification away from fiat assets and persistent fiscal imbalances. Short-term volatility offers an opportunity for gradual accumulation, with a gold allocation of 8-15 per cent for portfolio stability.

From a broader perspective, gold continues to be supported by persistent global uncertainties, including fiscal imbalances, geopolitical tensions, and ongoing diversification by central banks away from fiat assets.

“Short-term volatility, driven by shifting interest rate expectations and liquidity conditions, should be viewed as an opportunity for gradual accumulation rather than a deterrent. For retail investors, maintaining a gold allocation of 8-15 per cent remains a prudent strategy for portfolio stability. Additionally, this year presents a compelling case to include silver as a tactical allocation,” the report noted.

As per the Kotak report, on the MCX, gold has rebounded about 30 per cent from its March lows to trade above Rs 1,50,000. While technical resistance stands between Rs 1,60,000 and Rs 1,75,000, the underlying trend for bullion remains positive as the festival begins. (ANI)