Gold's diversification appeal strengthens as bond-equity correlation rises. The World Gold Council reports that traditional bonds no longer effectively hedge equity risk, with stocks and bonds increasingly moving in tandem. Gold, however, maintains negative correlation with equities across most periods, making it a superior portfolio diversifier during market stress. Analysis shows optimal gold allocations between 7.5 and 15 percent enhance risk-adjusted returns and reduce portfolio volatility over extended cycles. Geopolitical tensions and global economic uncertainties amplify gold's strategic value. Domestic prices remain influenced by rupee movements and international market dynamics, with currency depreciation typically supporting higher gold valuations for Indian investors.
