Should you buy gold this Akshaya Tritiya 2025?

YTD gains of 25% in gold- Most lucrative in over a decade

The first four months of 2025 have marked one of the strongest starts for gold investors in over a decade, with prices rising nearly 25 per cent so far. 

 

Phenomenal double-digit returns since last Akshaya Tritiya

After Covid-period gains in the precious yellow metal, gold prices have seen impressive growth over the past three years, offering double-digit returns for investors. In fact, since last Akshaya Tritiya (May 2024), gold prices delivered an outstanding over 30 per cent returns.

 

Safe-haven demand added to the glitter

As the tariff war between the US and China rattled the financial market, gold emerged as the ultimate safe-haven bet with investors flocking to the precious yellow-metal as a store of value amid economic uncertainty.

Central-bank purchases

Increased gold buying by global central banks has weighed on supply, supporting gold prices.

 

Correction in dollar index

Even though the dollar index has shown recovery lately, it fell to a three-year low supporting gains in gold. Typically, a fall in the dollar index makes gold cheaper for holders of other currencies, boosting both demand as well as price.

Lower rates anticipated in US

Also, as the latest US data points to softening in inflation, experts expect up to 1 per cent rate cut in the world's biggest economy. Any rate cut move supports buying in gold as the yellow-metal thrives in a low-interest rate environment, being a non-interest yielding security itself.

 

Gold price trend currently

In the current context, gold price has fallen 4 per cent from its all-time high of Rs 99,358 per 10 gm scaled last week. And as per  experts the  market appears to have topped out in the short term.

Gold prices to remain supported

Prithviraj Kothari, Managing Director of RiddiSiddhi Bullions Limited (RSBL) believes gold prices are likely to be highly supported. 

“Markets are still digesting President Donald Trump's softer tone on the U.S.-China trade war and his turnaround on wanting to fire Federal Reserve Chair Jerome Powell. Although recession worries have subsided, the global economy has suffered significant harm, and rebuilding trust in the United States as a dependable trade partner will take time. In this context, gold is projected to be highly supported,” he added.

Should you be buying gold this Akshaya Tritiya?

Deveya Gaglani, Senior Research Analyst- Commodities, Axis Securities held that currently the risk-reward ratio is unfavorable at these record levels. He added that as gold prices have surged and are approaching overbought levels, we recommend that investors consider buying gold in a staggered manner if prices correct by 5-10 per cent.

 

Near-term price outlook

Kothari opined that in case if we don’t see any new trigger in the market for a while, prices could correct 8-10 per cent up to Rs 90,000 in the short term. Echoing a similar view, Ajay Kedia- Director, Kedia Advisory expects gold to test Rs 91,000/ Rs 91,500 in the short term.

Price outlook for next Akshaya Tritiya

Gaglani believes in a bullish scenario, if prices hold above Rs 100,000, they could reach Rs 110,000 by the next Akshaya Tritiya. Conversely, we expect prices to consolidate around the 87,000 level on the downside, he adds.

Conclusion

So, as gold has a role in wealth preservation and works as a hedge against inflation, investors at best should base their investment decision in gold on portfolio diversification, financial goals as well as risk tolerance.

Kothari on the corpus one should allocated to gold said, "With rising geopolitical tensions, tariff uncertainty, central bank buying, and the possibility of economic instability, investors may want to consider increasing their gold allocation to 10-15% of a portfolio from the traditional allocation of 5% to hedge against uncertainty in the market and inflation and for overall diversification."