Gold hits record highs: Should you invest now or wait?
Gold has reached an all-time high of ₹91,950 per 10 grams, marking the second time in a week that it has breached this crucial level. The yellow metal has surged over 14% in the past year, fueled by economic uncertainties, geopolitical tensions, and changing monetary policies. With gold hitting record highs 14 times since January, investors are now wondering: should they buy or wait?
Why Are Gold Prices Rising?
Several key factors are driving gold's meteoric rise:
- Weakening US Dollar
The US dollar index has slipped to a five-month low, making gold more attractive to international buyers. A weaker dollar typically strengthens gold as it becomes cheaper for foreign investors, leading to higher demand.
- Trump's Tariffs Stir Uncertainty
US President Donald Trump’s aggressive trade policies have reignited fears of economic instability. The newly imposed 25% duty on steel and aluminum imports, along with anticipated additional tariffs, has increased safe-haven demand for gold. Historically, tariff wars lead to economic slowdowns, pushing investors towards stable assets like gold.
- Geopolitical Tensions Intensify
An Israeli airstrike in Gaza, ongoing trade disputes, and heightened tensions in the Middle East have further driven gold's appeal as a safe-haven investment. When global uncertainty rises, investors turn to gold to protect their wealth.
- Interest Rate Expectations
The US Federal Reserve’s upcoming policy decisions are being closely monitored. Economic projections suggest a potential slowdown and inflationary pressures, both of which favor gold as an inflation hedge. If interest rates remain unchanged or decrease, gold prices could climb even further.
What Are Experts Saying?
Analysts believe gold's bullish momentum is far from over. Prathamesh Mallya, Deputy VP-Research at Angel One, stated, "Trump's tariffs are expected to fuel inflation and economic uncertainty, driving gold to multiple record highs in 2025."
Meanwhile, Chirag Mehta, CIO at Quantum Mutual Fund, emphasized that gold has already set "nine record highs in 2025," despite occasional price fluctuations. The consensus? Gold remains a hedge against inflation and political risks.
Should You Invest in Gold Now?
While gold prices are at historic highs, investors should proceed with caution. Experts suggest a gradual accumulation strategy, rather than aggressive buying. Key events to watch include the US Fed’s policy meeting and global economic indicators. Short-term corrections may offer better entry points.
However, if geopolitical tensions persist and inflation fears grow, gold's rally could continue. Investors looking for long-term stability might still find gold a valuable addition to their portfolios.
Golden Chance
Gold has once again proven its resilience as a safe-haven asset. With inflation concerns, geopolitical uncertainties, and economic shifts dominating global markets, gold is likely to maintain its upward momentum. If you're considering an investment, timing and strategy will be crucial in maximizing potential gains.
