Gold has outperformed every major asset class: Indian households now hold an estimated 34,000 tonnes and gold has risen roughly tenfold over two decades, a concentration that forces a rethink of allocation and risk management for retailers and investors alike.
- Spot reference: long-run surge; 10x value over 20 years
- Estimated household holding: ~34,000 tonnes (India)
- Form: bullion, jewellery, sovereign reserves
- Date of note: performance observed across the past two decades through 2025
The Context
Gold’s performance since the mid-2000s has been both structural and sentimental. The metal’s substantial heft and soft malleability make it the preferred store of value in jewellery form; its satin sheen and density translate readily to sovereign reserves and ETFs. In markets through 2025, three trends shape demand and pricing: renewed focus on sustainability and recycled metal, the pricing gravity of large household holdings (notably in India), and a design-driven market where sculptural aesthetics command margin.
Traceability and recycled supply chains now attract premiums. For US retailers, the distinction between conventional bullion and responsibly sourced, audited gold is no longer only ethical — it’s economic. Consumers buying high-design pieces value the tactile weight and finish as much as provenance; that combination supports higher retail price points even as raw bullion becomes more volatile.
The Impact
For a US jeweller or investor the implications are immediate and measurable. On inventory, heavy exposure to plain bullion or commodity-style gold jewellery compresses margins when spot moves. Conversely, limited runs of traceable, design-led gold pieces capture consumer willingness to pay, offsetting input-cost volatility with higher unit economics.
On the investor side, a decade-plus rally that outpaces equities and fixed income undermines classic diversification assumptions. Gold’s historical correlation with real rates and inflation means a prolonged rally can crowd out risk-budgeting in a portfolio; investors exposed to bullion, sovereign allocations, or gold-heavy ETFs may face concentration risk as global household hoarding acts as a quasi-supply sink.
Practical steps: manage inventory financing with shorter turns and buyback provisions; price and market recycled, audited gold separately; lean into sculptural, limited-production pieces that exploit consumers’ preference for weighty, tactile luxury; hedge large bullion exposures with options or cross-asset cushions (platinum, industrial metals, or inflation-linked bonds).
What US Retailers and Investors Should Do Now
- Reassess exposure: quantify gold’s share of working capital and portfolio AUM; set explicit concentration limits.
- Differentiate product: label recycled/traceable gold, command premium for provenance and artisanal finish.
- Shorten financing cycles: tighter inventory turns reduce mark-to-market pressure when spot reverses.
- Diversify tactically: add design-forward metals and lab-grown stones where appropriate, and consider cross-hedges to real rates.
Gold’s decade-long ascendancy is not a reason to abandon it — its vitreous appeal, weighty warmth and proven inflation hedge remain core. But the very success that has elevated gold also demands disciplined allocation, fresh supply-chain thinking and a retail strategy that converts bullion’s heft into sustained premium rather than balance-sheet risk.
Continue reading
Image Referance: https://www.msn.com/en-in/money/markets/why-surging-gold-must-not-overshadow-diversification/ar-AA1TyA7M