At Rs 1.12 lakh per 10 gm, is it too late to invest in gold? Alok Jain has answers

Gold at all-time high: The global economy is once again at a dangerous inflection point, and gold is at the center of the conversation. Domestic gold prices touched an all-time high of Rs 1,12,750 per 10 grams this week, in line with a global surge. Over the past year alone, the yellow metal has gained 53%, leaving the Nifty 50’s sub-1% return far behind. For investors, the burning question is simple: Is it too late to enter gold now?

According to Alok Jain, Founder of Weekend Investing, the answer depends less on short-term price action and more on long-term perspective. “I have been advocating gold for nearly a decade and investing in it for 30 years. Unfortunately, Indian investors have long been told gold is just jewelry or a ‘pet rock.’ That is a great disservice because gold is one of the most powerful diversifiers in asset allocation,” says Jain.

He points out that while gold often delivers “lumpy returns” — sharp rallies followed by long periods of consolidation—it has consistently proven its worth during global stress. “From the early 1970s, when the US delinked the dollar from gold, we’ve seen multiple cycles of explosive moves. In some phases, gold rose 6–8x within just a few years, before cooling off. This is the nature of the asset,” he explains.

History also shows that drawdowns in gold can be steep, but long-term holders have been rewarded. Jain recalls: “In USD terms, gold once corrected 70% and took two decades to recover. But in Indian rupee terms, currency depreciation ensured gold still clocked significant gains. That’s why domestic investors should view gold as insurance against not just equity downturns but also currency shocks.”

So is gold overbought at current levels? Jain admits momentum is running hot. “On a monthly basis, gold looks stretched. Buyers may want to wait for dips. But there’s also the possibility that this is one of those rare situations where the market doesn’t give you meaningful corrections,” he says.

The drivers of today’s rally, Jain argues, are unlike earlier cycles. “Central banks are the biggest buyers now, accumulating over 1,000 tonnes annually compared to 200–300 tonnes earlier. Nations are reducing reliance on the US dollar, especially after Russia’s reserves were frozen in 2022. Countries, including India, are selling US treasuries and adding to gold reserves. This structural shift is creating sustained demand.”

For investors debating allocations, Jain is unequivocal: “Don’t think of gold as a trade. Think of it as a core allocation. If your financial adviser tells you to ignore gold, find a new adviser. A token 2–5% exposure is not enough—you need a meaningful share of your portfolio in gold, given the risks the global economy faces.”

The bottom line: Gold may look expensive after its meteoric rise, but history suggests new highs often come in clusters. For long-term investors, the question isn’t whether to buy gold at the top—it’s whether they can afford not to hold it at all.