Gold Prices Soar To Historic Levels And Breach Rs 1 Lakh, What Should Investors Do Now?
Gold prices continued to scale new peaks on Tuesday, supported by strong investor interest in the yellow metal amid deepening global financial uncertainty. For the fourth straight session, domestic gold futures extended their rally, reflecting both international price action and increasing safe-haven buying.
Internationally, gold prices surged to a new high of $3,504.12 per ounce before settling slightly lower at $3,490.72, still up $65.42 or 1.91 per cent. The global rally in bullion was attributed to growing concerns over the direction of US monetary policy after President Donald Trump announced plans to revamp the Federal Reserve.
Domestically, the gold prices breached Rs 1 lakh per 10 gram and hit a new historic high. In Delhi, the price of 22K gold stood at Rs 93,050 per 10 gram, while 24K gold was priced at Rs 1,01,500 per 10 gram.
Market watchers noted that the uncertainty was heightened by the ongoing standoff between Trump and Fed Chair Jerome Powell, particularly over interest rate policies. Trump's push for immediate rate cuts, against Powell's resistance citing inflationary pressures, sent tremors through financial markets. Adding to the tension, White House advisor Kevin Hassett said last week that Trump’s team was examining the possibility of removing Powell from his position.
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What Should You Do With Your Gold Investment?
Gaurav Goel, a SEBI Registered Investment Advisor, pointed to structural shifts in the global financial landscape as a key driver of the surge. "Gold has crossed levels of Rs 1,00,000 per 10 gm on Indian exchanges clearly demonstrating a long term structural move in the prices of the yellow metal," he noted.
He highlighted that gold outperformed most asset classes over the past year with a 50 per cent increase, attributing the rise to geopolitical tensions, investor preference for safe-haven assets, and a weakening dollar. "Much of the current move can be attributed to the geopolitical trade tension in the globe. Investors are looking at safe haven options and gold perfectly fills the vacuum," the expert said.
He pointed out a significant trend in central banks, especially in Asia, reducing their exposure to US treasuries and increasing gold reserves. “Freezing of Russian assets in 2022 and the latest Trump tariffs have added to the suspicion. Central Banks, particularly in China and Japan, are selling their holdings of US treasuries and replacing it with gold purchases which has accentuated gold prices,” he added.
He further said that the trend appears irreversible for now. Despite the sharp rally, he remained bullish on gold, albeit with a note of caution. “We advise investors to remain invested but asset allocation in the yellow metal should not exceed 10-15 per cent of the entire holdings,” he advised.
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