Gold Prices Surge 9%, Investors Flee Precious Metals for Safer Assets

Gold prices surged over 9% this month, outperforming broader equity markets in India. Despite this significant gain, investors largely shifted their gains into safer assets rather than reinvesting in precious metals.

Precious metal inflows dropped sharply from Rs 8,680 crore in June to Rs 4,084 crore in July, while money-market and fixed-income funds attracted substantial investments. In fact, Rs 1,40,390 crore flooded into money market funds against last month's Rs 65,530 crore of outflows.

The report from Vallum Capital attributed the immediate trigger for gold price gains to the US jobs report that came in far weaker than expected, briefly reducing fears of another Federal Reserve interest rate hike.