Gold Nears ₹1 Lakh: Experts Advise ETFs and Multi-Asset Funds for Strategic Investment

Gold prices are gradually closing in on the ₹1 lakh benchmark, prompting investors to rethink their investment plans for their portfolios. While demand is driven by global uncertainties and inflation concerns, financial experts recommend exchange-traded funds (ETFs) and multi-asset funds as intelligent means of entering the yellow metal.

Market Trends and Investment Strategies

Gold has appreciated due to geopolitical tensions, monetary policies undertaken by central banks, and unstable currency fluctuations.

Experts recommend systematic investment plans (SIPs) for gold ETFs to avoid short-term fluctuations.

Multi-asset funds, which invest some amount in gold along with equities and debt, offer diversification advantage.

Performance and Portfolio Allocation

Gold ETFs have witnessed renewed investor interest, with May registering ₹292 crore of inflow.

Multi-asset allocation funds have outperformed diversified equity funds, having gained strength from the recent performance of gold.

Financial planners recommend including 10-15% of gold in an investor's portfolio for hedging risk and return.

Future Outlook and Considerations

Analysts expect sustained gold price firmness, driven by hedging inflation and central bank purchases.

Silver ETFs are gaining as a parking option in precious metal investment.

Investors should reflect on their risk tolerance and investment time frame prior to making an allocation choice.

Sources: Moneycontrol, Economic Times, MSN, Rediff, GoodReturns.