Gold Demand Soars Amid Equity Market Volatility: A Long-Term Strategy

Gold can play a crucial role in long-term financial planning, especially when it comes to diversification and reducing exposure to equity market risk. According to recent data, global demand for gold has been strong, with Indian investment demand reaching 82 tonnes in the first quarter of 2026, up 54% year on year.

The World Gold Council notes that gold has a long-term record of positive returns across different economic cycles and is supported by multiple sources of demand. Central banks also hold gold as a reserve asset, adding to its appeal. However, it's essential to note that gold remains volatile, so a measured allocation works better than relying solely on gold.

A study found that even a modest gold share can change the risk profile of a wider portfolio, with higher risk-adjusted returns and lower drawdowns when 2.5%, 5%, 7.5%, or 10% of the portfolio is held in gold. The World Gold Council also estimates that the value of physical gold held by investors and central banks stands at approximately $12.6 trillion.