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Gold has long held a unique position in Indian households—not just as an investment, but as a store of wealth, cultural asset, and financial safety net. However, Gold prices have fallen about 8% since the U.S. and Israel launched strikes on Iran in late February.

Does this recent fall in gold prices amid this geopolitical tension indicate that the underlying trust in the asset has weathered?

The answer is no, it still remains the most picked asset by Indian households.

A recent report by Axis Securities highlighted that the current global macro environment continues to favour gold irrespective of the economic cycle. Whether inflation remains elevated or interest rates begin to ease, the broader setup creates a supportive backdrop for bullion, reinforcing its role as a core portfolio asset.

The brokerage noted that gold has moved beyond being a passive hedge to becoming a “high-growth safe haven,” supported by structural shifts such as rising institutional accumulation and changes in global reserve allocation. Notably, for the first time, the total value of gold held by central banks has surpassed their US Treasury holdings, signalling a deeper shift in how gold is perceived globally.

For Indian households, this evolving global narrative is translating into continued trust, albeit through new channels such as exchange-traded funds (ETFs) and financial investments rather than only physical gold.

Domestic flows provide one of the clearest indicators of this trust. According to Mirae Asset Mutual Fund, India has emerged as a key stabiliser of gold demand, particularly through financial investments.

“India has emerged as a financial demand stabiliser for gold. Domestic gold ETFs recorded ₹31,561 crore of inflows in Q1 FY26, one of the strongest quarters on record, driven by geopolitical risk, equity volatility and inflation concerns,” Mirae Asset said in a recent note.

Even as gold ETF assets under management declined in March 2026 due to price corrections, flows remained positive, indicating that Indian investors are allocating strategically rather than reacting to short-term market movements.

Globally, too, gold continues to draw strong institutional interest. Central banks remain a major source of demand, providing a structural floor to prices.

Mirae Asset Mutual Fund further noted, “Central banks continue to provide a structural demand floor. After net purchases of ~863 tonnes in the year 2025, WGC expects another 750–850 tonnes of buying in 2026, well above historical averages.”

Geopolitical uncertainties—from tensions in the Middle East to ongoing global conflicts—have further strengthened gold’s appeal as a hedge against tail risks. These factors continue to influence Indian household behaviour, as investors seek stability amid volatility in equities and other asset classes.

While gold prices have seen short-term volatility, including corrections driven by ETF outflows and global liquidity adjustments, the broader outlook remains supported by strong structural drivers.

Mirae Asset Mutual Fund pointed out that recent corrections were largely technical and liquidity-driven, with medium-term fundamentals remaining intact. Continued central bank buying, sustained ETF demand and persistent geopolitical risks are expected to support gold going forward.

From a price perspective, Axis Securities expects domestic gold prices to move toward ₹1,70,000– ₹1,85,000, implying a potential upside of 10%–15% from current levels.

For Indian households, the shift is not away from gold—but toward more financialised ways of holding it. The preference for ETFs and other investment formats indicates a transition in behaviour, not a decline in trust.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.Pranati Deva is a seasoned financial journalist with over a decade of experience in high-pressure newsroom environments, currently working as a Senior Sub Editor at LiveMint. Over the years, she has developed a reputation for sharp editorial judgement, a strong grasp of market dynamics, and the ability to translate complex financial developments into clear, engaging stories for a wide audience.

Her core areas of coverage include stock markets, leading listed companies, currencies, and commodities, with a particular strength in fast-paced, real-time market reporting. She is known for handling breaking market news, earnings-driven stock movements, and macroeconomic developments with speed, accuracy, and context—qualities that are essential in financial journalism.

Pranati has built a diverse and credible professional track record across some of India’s most respected news organisations, including MintGenie, CNBC-TV18, Business Standard and EconomicTimes.com. During her stints at these platforms, she produced data-driven market stories, curated and steered live blogs during volatile trading sessions, and conducted interviews with market veterans, fund managers, economists, and industry experts. Her work often combines on-ground reporting with analytical depth, helping readers make sense of daily market fluctuations and longer-term trends.

An alumnus of the Symbiosis Institute of Media and Communications and Hansraj College, University of Delhi, Pranati brings a strong academic foundation to her journalism. She specialises in real-time financial reporting, with a keen focus on precision, balance, and insight, aiming to decode market movements in a way that is both informative and accessible to readers across experience levels.

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