Gold & Silver glitter but expensive—What should you do?
Gold prices in India have surged to record highs of Rs.92150 per 10 gm, the increase is driven by global economic uncertainties relate to tariff wars, geopolitical tensions, and strong investment demand. This surge in demand can be attributed to:
- Trump tariff development unsettling global economy
- Escalating geopolitical tensions in Middle East and Ukraine
- Strong buying from Central Banks to reduce dollar reserves
1 year returns of Nifty is 8.3% while Gold has risen by 30% in past 1 year and Silver gained by 29% on back of industrial demand in EV and solar energy; but keep in mind the volatility in silver is quite high.
It is to be noted Gold which is taken as safe haven asset, its long-term track record is not so great. From 1979 to 2003 – it delivered 0% returns while from 2012 -2018, returns were flattish
Comparing Nifty returns with Gold on long term basis, equities have delivered strong long-term average returns with relatively lower volatility (if we look at 10 yr rolling returns)
Market cycles fluctuate, and following short-term trends can lead to costly mistakes. A disciplined, diversified portfolio aligned with a clear asset allocation strategy remains the foundation of long-term financial success.
- For long term investing, Gold must be 10-15% of overall asset allocation.
- Prioritize equity exposure for long-term wealth creation.
- Avoid chasing past performance—stick to a disciplined investment strategy.
- Not right time to buy in bulk but SIP averaging is best if purchasing through Gold ETF. No need to increase exposure if you already hold Gold/Silver more than 15% of overall portfolio
Besides input for jewellery and asset class, gold is a safe haven for investors during times of uncertainty. It is a hedge for investors against any uncertainty and price volatility
Investors should closely monitor economic indicators and geopolitical developments for potential impacts on gold prices while staying attuned to buying opportunities amid the bullish trend,
Gold is in a sweet spot ; it will keep rising if inflation increases or remains high ; but will also do well if interest rate are cut by central banks.
Robins Joseph , SEBI Registered Investment Adviser , Certified Financial Planner. Founder of MyGuide2Wealth (www.myguide2wealth.com) based in Noida specializing in wealth, investment, retirement services with clear aim of Spreading financial literacy and advocating on India's strong equity story
