Investors in India are worried especially after Franklin Templeton unexpectedly announced its decision to wind up six of its India funds. With rising uncertainty as most economic activities across the country has come to a standstill, investors may turn to gold—considered a safe investment option.

Typically, in uncertain times, Indians have preferred gold, considered a safe investment option and asset. Besides, gold has a cultural and emotional connect with Indians.

“Gold is a hedge against uncertainty and a good investment vehicle, especially in the current scenario. With the Covid-19 pandemic bringing the world economy to a standstill and a possible contraction ahead, gold seems an attractive option,” Pankaj Bobade, head, fundamental research, Axis Securities, said ahead of Akshaya Tritiya.

As central banks across the world have been on an easing spree to fight the economic contraction, the fiat currencies are expected to face pressure in the near future, he said, adding that in such a scenario, gold would emerge as a safe-haven asset. “One should have a part of the portfolio invested in gold ETF as an insurance against the possible volatilities expected in the global financial market.”

Gold exchange-traded funds are also witnessing an unprecedented spike in demand.

Meanwhile gold buying during Akshaya Tritiya, despite a lockdown and shops being closed, witnessed a surge through online platforms.

At present, sales for gold jewellery, however, have dropped drastically as shops across the country are closed due to the national lockdown. Ashok Minawala, board member at the All India Gems and Jewellery Trade Federation, said that there has practically been no sale in the last one month.

“All factories are closed and now there is an acute shortage of labour, there has been very little sale for jewellery in the last one and half months,” Minawala said.

But once shops open and economic activities resume, investors are likely to turn to gold and jewellery buying may resume, he added..