Gold touches Rs 1.11 lakh: Should you buy gold now at record highs or wait for cooling?

Gold has been on a meteoric run, leaving many investors asking the same question: should you buy gold now at its peaks, or wait for a correction? Domestic gold prices touched an all-time high of Rs 1,12,750 per 10 grams this week, in line with global momentum. Over the past year, the yellow metal has surged 53%, far outpacing the less than 1% return in the Nifty 50.

According to a research note from Axis Mutual Fund, many retail investors have already started booking profits—selling old jewellery at current highs, with plans to re-enter if prices dip. But the right approach depends on how you hold gold. Jewellery, for instance, is rarely treated as a trading asset. Investors holding financial instruments like gold ETFs, sovereign gold bonds, or futures may consider partial profit-taking if gold has become an outsized share of their portfolio.

Analysts caution that while gold’s long-term story remains intact, near-term prices look stretched. “We could see some cooling given the sharp rally,” says Anindya Banerjee, Head of Commodity and Currency Research, Kotak Securities.

Banerjee adds: “Core allocations to gold should be preserved, as they play a vital role in diversifying risk and stabilising returns across market cycles.”

Record highs

Gold has risen at its fastest pace in rupee terms since 1979, outperforming equities across most time horizons. Despite its dizzying rally, experts advise taking a long-term perspective. A staggered buying strategy—investing gradually and using price pullbacks to add exposure—helps investors avoid chasing peaks while still participating in the long-term uptrend.

“Investors should not treat gold as a quick trade. Think of it as portfolio insurance,” says Rishabh Nahar, Partner, Qode Advisors PMS. He recommends using instruments like gold ETFs or sovereign gold bonds instead of buying large chunks of physical gold in one go.

Gold vs Silver

An interesting dynamic lies in the gold-silver ratio (GSR). Historically, the GSR averages around 50–60, but today it sits at 84, suggesting that gold looks relatively expensive compared to silver.

“From a relative value perspective, silver appears more attractive right now,” says Ross Maxwell, Global Strategy Lead, VT Markets. “Silver not only plays the role of a precious metal but also benefits from industrial demand in solar, electronics, and EVs. A balanced approach could be to hold some gold for stability while increasing allocation to silver for growth potential.”

Central banks backing gold

Another tailwind for gold comes from central banks, which have been diversifying away from US dollar reserves. With the dollar down 11% this year and global bond yields rising, gold has increasingly become the reserve asset of choice. This shift, combined with expectations of US Federal Reserve rate cuts and ongoing geopolitical tensions, continues to underpin gold demand.

So far this year, the metal has gained around 39% globally, with some analysts warning of resistance near $3,900 an ounce. Yet, they maintain that the long-term outlook remains bullish given low institutional exposure and continued central bank buying.

Investors should note

For investors, the takeaway is clear: don’t chase gold at record highs with lump-sum purchases. If gold has grown disproportionately in your portfolio, consider limited profit-taking. For fresh exposure, stagger your buying over time, lean on ETFs or sovereign gold bonds, and balance gold’s safety with silver’s growth potential.

Gold may be peaking in the short term—but as a hedge, store of value, and portfolio stabiliser, it remains indispensable in a long-term strategy.