I have been a big supporter of investment in bullion (gold and silver). This helps to protect against the effect of inflation. I have written about this before. I have even said that you should put up to 20 % of your total investment in bullion. Investors have earned a big return by investing in gold in the last few quarters. However, gold has been under pressure for the last few weeks. This article talks about concern related to it.
The fact that gold and silver are yielded, it is compared to midcap stocks. The verification of maths data is not required. There are many things that have been accepted as true. For example, the sun comes out during the day and the moon comes out at night. Correction in gold became necessary. There have been many reasons for the boom in gold. The biggest reason for these is fear. The growing trade war between the US and China and more tariffs on other countries created an atmosphere of fear.
The US central bank has been a big gold buyer in Federal Reserve Commodity Markets. Now the atmosphere of fear of doing trade deal of America from different countries is decreasing. The trade war between the US and China is towards the end. This has reduced the concern and the huge investment in gold has decreased. This has softened the prices of gold. This does not mean that the bullion has ended.
In the US, the debt burden on the government is increasing at a speed of $ 1 million every quarter. The Trump government’s focus has been only on small issues like tariffs. As the debt burden on America is increasing, interest is increasing on it. This is putting pressure on America’s balance sheet. Its effect is also visible on the currency market. US dollars have seen weakness. Weakness in the dollar will have an impact, as most of the business in the world is still in dollars.
Due to the dollar being the world’s largest reserve currency, if there is any change in its position, then its effect will be seen. Talking about the most accepted asset in the world, what is the second investment than gold? It also has to be kept in mind how the central banks of the world have invested big in gold in the last three years. These central banks may come forward in the event of a major decline in gold and protect the gold from falling.
Gold made a high of Rs 99,704 per 10 grams in MCX. It was built in April 2025. This phase of boom in gold started when the price of gold was around Rs 67,000 per 10 grams. This means that the price of gold has increased by about Rs 32,704. This is completely normal to correction of 35 percent. Such correction is common in commodity markets. This is the reason why I have been a supporter of delivery/physical investment instead of liverized bing in bullion.
Technical charts are indicating support at Rs 86,000 per 10 grams in gold. Until Gold goes below Rs 84,000 per 10 grams, I will not spoil my sleep due to its falling prices. I have been writing about this since September 2022. I have seen a decline in gold for a short time. However, both of them have returned with strength.
Vijay Bhambwani
(The author is the founder and CEO of a property firm. The views expressed here are his personal views. It has no relation with this publication.)