After Record Rally in Gold & Silver, Experts Urge Investors to Book Profits
Investors Should Consider Booking Profits on Precious Metals
Wealth managers and strategists have a crucial message for investors who have seen considerable gains from the recent surge in gold and silver: it’s time to take profits. With both precious metals more than doubling in value over the past 18 months, the current risk-reward profile suggests that holding substantial positions may carry heightened risks.
Key Market Insights
– Impressive Gains: Over the past 18 months, gold has climbed 101% in dollar terms and 116% in rupee terms. Silver has outperformed even further, soaring 167% in dollar terms and 198% in rupee terms.
– Recent Price Adjustments: Although both metals experienced a decline from their peak levels in January 2026—gold down 7.8% and silver even more significantly at 36.63%—experts believe that this may not justify new large investments at this moment.
– Strategist Recommendations: Sahil Kapoor, head of Products and market strategist at DSP Mutual Fund, advises, “If you bought gold and silver over the past 18 months, now is the time to take profits and reassess your position.”
Cautious Approach to Future Investments
– Market Perfection: Akshay Chinchalkar, managing partner and head of strategy at The Wealth Company, remarks, “Precious metals are currently priced to perfection following the significant price increases we have witnessed.” He suggests waiting for a pronounced correction before reinvesting.
– Investing Strategy: Chinchalkar prefers utilizing Systematic Investment Plans (SIPs), a method of gradual investment, to build exposure to gold rather than attempting to time the market.
Surge Driven by Multiple Factors
The remarkable rise in gold and silver has primarily been fueled by:
– Safe-Haven Demand: Ongoing geopolitical tensions and aggressive trade policies have made these metals appealing as safe-haven assets.
– Inflationary Pressures: Persistent inflation has further bolstered gold and silver’s status as reliable stores of value.
– Growing Industrial Demand for Silver: Beyond being a safe-haven asset, silver’s expanding industrial applications—from solar panels and electric vehicles to AI technologies—have significantly contributed to its price surge.
Investor Behavior Trends
– Increased Investment in Precious Metals: Recent months have seen Indian investors shift focus from equities to precious metals, with record investments flooding in.
– In January, inflows into gold and silver schemes reached ₹33,503 crore, outpacing equity funds for the first time and more than doubling December’s total of ₹15,600 crore, as flows into equity mutual funds decreased by 14%.
– Advisory for New Investors: Strategists caution new investors against large allocations in gold and silver at this time. Kapoor suggests, “To avoid FOMO (Fear of Missing Out), starting with a small SIP can provide a balanced approach.”
Conclusion
As the gold and silver markets experience unprecedented surges, strategists emphasize the importance of booking profits and adopting a cautious investment strategy. With the current market conditions, engaging in systematic investments may provide a sound approach while navigating potential future volatility. Investors should diligently evaluate their positions to make informed decisions in these dynamic markets.