People have confidence in the investment potential of gold but there are certain elements of mistrust as well that are acting as a barrier even as the yellow metal is the third-most popular investment choice among retail investors, according to the latest consumer survey by the World Gold Council.
“Gold is the third-most consistently bought investment — 46% of global retail investors have chosen gold products, behind savings accounts (78%) and life insurance (54%),” stated the Retail Gold Insights 2019 report by the World Gold Council.
Interestingly, 67% of the respondents in India — the survey covered China, India, North America, Germany and Russia — said they were considering investing in gold and had invested in gold in the past as well. The share of such respondents in India was much higher than all other markets barring China, where the share was pegged at 72%.
Further, 37% of the respondents in India — among fashion and lifestyle consumers — said they were considering buying gold though they had never bought the precious metal in the past. The share of such respondents was pegged at 30% in China and 40% in the U.S.
Good safeguard against inflation
“More than a third of all retail investors and fashion and lifestyle consumers have never bought gold in the past but are warm to the idea; there is huge potential for the market to grow if this untapped source of demand can be converted,” it added.
However, 14% of such respondents in India said they would not consider buying gold — the same as China and two percentage points more than the U.S. The study also found more than two-thirds of retail investors believed gold was a good safeguard against inflation and currency fluctuation and that it would not lose its value in the long term.
On a different note, the report also found that there are certain areas of mistrust “among those that have never bought gold in the past, but are open to the idea of buying it in the future.”
As many as 48% and 28% of all potential investment and jewellery consumers respectively cited lack of trust as a significant barrier primarily on account of “fake or counterfeit bars and coins, product purity, or the trustworthiness of some retailers,” stated the report.
Published - November 13, 2019 10:18 pm IST
