Gold has become the topic for discussion in every household and office around the world. Gold prices have jumped from around Rs. 80,000 per 10 grams at the beginning of the year to over Rs. 1,23,000 now (approximately US$ 4,100 per 10 gms).
The surge has created a fear of missing out (FOMO) among investors. Many are buying gold as they don’t want to miss this once-in-a-lifetime rally. But investing in gold should not be purely emotional. History shows us that while gold generally rises over time, understanding when to buy, hold, or sell is key.
Looking Back: Gold’s Journey Over 50 Years
We are considering the Gold ($) prices and their performance as we don’t have older data available for the Indian Gold price:
Gold Monthly Chart
- 1970–1974: 478% rally
- 1976–1980: 775% rally
- 2001–2011: 665% rally
The current rally, which started in 2016, has already delivered nearly 292% growth. But if history is any guide, gold could still have more room to rise. The important question for Indian investors is not whether gold will rise but when this rally might end.
The Dollar Connection: Gold vs DXY
Gold and the US Dollar Index (DXY) are inversely related and like opposite sides of a seesaw. When the dollar weakens, gold tends to rise. When the dollar strengthens, gold may struggle.
Gold vs DXY Monthly Chart
- 1970s: The early weakness in the dollar helped gold start its big rally.
- Late 1970s: Each dip in the dollar sparked another surge in gold.
- 2001–2011: A significant fall in the dollar from 120 to 72 helped gold rise over 600%.
- 2025: The DXY recently broke key support levels, triggering a breakout of gold prices from the range of $3,100-3,200 per ounce.
When Should You Take Profits?
Every rally ends. Past corrections teach us that:
- In 1980, gold hit $875 before falling to $275 in five years.
- In 2011, gold peaked at $1,920 and corrected to $1,046.
Investors should watch for a structural reversal in the DXY when the dollar starts forming higher highs and higher lows; it could signal the end of the rally. Until then, gold’s upside remains intact.
How Indians Can Invest in Gold
For Indians, here are three ways to invest wisely in gold:
- Physical Gold
- Gold ETFs
- Gold Mutual Funds
Ride it, but Focus on
Gold is still a strong investment, thanks to Rupee depreciation and global trends. Also, watch the US Dollar Index (DXY) closely, as soon as you witness a reversal that marks the end of the rally, look for partial profits.
By balancing sentiment with strategy, continue celebrating life’s milestones, secure their savings, and ride gold’s long-term growth.
Note: The purpose of this article is only to share interesting charts, data points and thought-provoking opinions. It is NOT a recommendation. If you wish to consider an investment, you are strongly advised to consult your advisor. This article is strictly for educative purposes only.
Brijesh Bhatia is an Independent Research Analyst and is engaged in offering research and recommendation services with SEBI RA Number – INH000022075. He has two decades of experience in India’s financial markets as a trader and technical analyst.
Disclosure: The writer and his dependents do not hold the stocks discussed here. The website managers, its employee(s), and contributors/writers/authors of articles have or may have an outstanding buy or sell position or holding in the securities, options on securities or other related investments of issuers and/or companies discussed therein. The content of the articles and the interpretation of data are solely the personal views of the contributors/ writers/authors. Investors must make their own investment decisions based on their specific objectives and resources, and only after consulting such independent advisors if necessary.