Posted on March 18, 2025, by Niftynews
As gold prices near the record high of Rs 90,000 per 10 gm, investors are left wondering whether it’s the right time to buy, hold, or book profits. With gold currently trading at Rs 88,100 per 10 gm (as of March 17, 2025), the price surge has raised several questions for potential investors. While gold traditionally acts as a hedge against economic uncertainty, its recent climb has brought both optimism and caution.
Gold Price Surge: A Safe-Haven Investment Amid Global Uncertainty
The surge in gold prices has been largely driven by safe-haven buying as investors flock to the yellow metal amid global uncertainties. In particular, the US tariffs, trade tensions, and fears of a recession in the US have sparked renewed interest in gold as an investment.
Prathamesh Mallya, Deputy Vice President-Research at Angel One, points out that gold is seen as a hedge against political risks and inflation. The ongoing trade tensions, particularly under the leadership of President Trump, have created an environment where investors are increasingly turning to assets like gold to preserve their wealth.
Gold Price Performance in 2024 and Beyond
In 2024, gold delivered an impressive return of over 20%, significantly outperforming the Nifty index, which posted a more modest 8.7% return. This strong performance has fueled continued investor interest in gold, with many viewing it as a safe bet in times of market volatility.
Further supporting this trend, expectations of monetary policy easing by the US Federal Reserve have contributed to rising demand for gold. Ajay Garg, CEO of SMC Global Securities, notes that lower interest rates tend to push investors toward gold, as it becomes a more attractive option in a low-rate environment.
Key Factors Driving Gold Prices
The increase in gold prices can be attributed to several key factors, including the accumulation of gold reserves by central banks worldwide and growing inflation concerns. Chirag Mehta, Chief Investment Officer at Quantum Mutual Fund, points out that gold has reached nine new record highs in 2025, despite occasional price fluctuations. Trump’s tariffs and the broader economic uncertainty have played a significant role in driving this surge.
Another key factor contributing to gold’s ascent is the persistent concerns over stagflation—a combination of slow economic growth and high inflation. With gold historically being a strong performer during inflationary periods, this environment has provided fertile ground for its continued rally.
What Should Investors Do? Buy, Hold, or Book Profits?
With gold nearing Rs 90,000 per 10 gm, experts suggest a cautious approach. Yash Sawant, Commodity Fundamental Analyst at Choice Broking, advises investors to take a strategic approach by accumulating on dips rather than chasing the momentum. As policy signals and macroeconomic risks evolve, gold’s price may see some volatility in the near term.
NS Ramaswamy, Head of the Commodity Desk at Ventura, predicts an 8-10% upside for gold in the near future, driven by ongoing inflationary concerns and economic slowdown. However, he also emphasizes the potential risks of higher rates or a strengthening US dollar, which could limit gold’s growth.
Experts Recommend Diversification and Long-Term Investment in Gold
While the current surge in gold prices may prompt some investors to consider booking profits, experts advise a more diversified approach. SMC Global Securities’ Garg recommends that investors should follow a diversification strategy and consider investing in gold instruments to manage risk in the long term.
Gold is an ideal investment for those looking for long-term wealth preservation amidst market volatility. However, experts warn against becoming overly bullish on gold at these higher levels.
Gold: A Hedge Against Volatility
Gold remains a reliable hedge in times of economic instability and inflation, but investors must remain mindful of the potential for volatility. It is recommended to allocate 5-15% of your portfolio to gold, but to avoid excessive exposure at these elevated prices.
Conclusion: Is It Time to Buy, Hold, or Book Profits?
As gold prices approach Rs 90,000 per 10 gm, the decision to buy, hold, or book profits depends on individual investment goals and market outlook. While gold continues to shine as a safe-haven investment, market conditions could lead to price fluctuations in the near term. It is essential for investors to stay informed and consider accumulating gold strategically, keeping in mind both the short-term volatility and the long-term stability it offers.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a financial advisor before making any investment decisions.
