As gold prices fall, investors should adopt a staggered allocation strategy to build exposure rather than deploying lump sum investments at current levels. The prices have fallen 16% to Rs 1,46,842 per 10 grams on March 20 from a peak of Rs 1,75,231 on January 29, 2026.
Maintaining an allocation of around 10% within a diversified portfolio remains a prudent approach. Investors whose portfolios have become overweight on gold following the recent rally may consider partial profit booking to rebalance their holdings.
In the current rally, gold has offered limited opportunities for fresh entry, re-entry, or accumulation. Chirag Mehta, chief investment officer, Quantum AMC, says given the still-positive outlook considering fiscal stress and geopolitical tensions, this dip should be viewed as an opportunity to accumulate. “It presents a favourable window for disciplined, long-term investors, as well as for those looking to begin a staggered allocation to gold.”
Gold Outlook
At present, the trajectory of gold is being influenced more by monetary policy signals than geopolitical developments. Higher-for-longer interest rates increase the opportunity cost of holding gold, while a strengthening US dollar continues to weigh on prices.
Despite near-term volatility, the broader structural outlook for gold remains positive. Continued central bank buying, elevated global debt levels, and persistent geopolitical uncertainties continue to underpin long-term demand for the precious metal.
Macro Pressures
Sunil Katke, head, commodities retail business, Kotak Securities, says while geopolitical developments typically support gold prices, the current correction reflects the impact of elevated global interest rates, a strong US dollar, and profit booking following the sharp rally witnessed over the past year. “Gold has already priced in a significant degree of uncertainty, and what we are witnessing now is a phase of consolidation rather than a reversal of the long-term trend.”
For investors, gold exchange traded funds (ETFs) remain a suitable option where the cost of transaction also remains minimal. “It is advisable to choose ETFs that are fully backed by gold to ensure better alignment with gold price movements,” says Mahendra Luniya, chairman, Vighnaharta Gold.
The current phase should be viewed as a healthy correction within a larger bullish cycle. Gold continues to play a critical role as a portfolio diversifier and hedge against macroeconomic and geopolitical risks.