'Gold doesn't always glitter': This CA's post might change your mind

India Today

01-05-2025

As gold prices inch closer to Rs 1 lakh per 10 grams mark again, CA Nitesh Buddhadev is advising investors to keep a long-term perspective. He pointed out that while gold's recent surge may seem exciting, its performance over the years tells a different story.Buddhadev wrote on LinkedIn, 'Gold doesn't always glitter: It gave almost zero returns for 8 years. This data will blow your mind. Yes, gold just touched Rs 1 lakh per 10 grams. Yes, it has given fantastic returns in the last 4 years. But before you jump in seeing this shiny headline — zoom out.'
advertisementHe then shared a surprising fact that, over an eight-year period, gold gave almost zero returns. Between 2012 and 2019, the price of gold barely moved, from Rs 31,050 to Rs 35,220 per 10 grams. That's a total return of just 13% over 8 years, which works out to less than 1.5% per year, mentioned CA Nitesh Buddhadev in his post.
What's even more surprising is that between 1992 and 2002, gold went from Rs 4,334 to just Rs 4,990, giving a yearly return of under 1.5% once again, he added.So why the sudden price hike in recent years? Buddhadev points to a combination of global shocks, like COVID-19, wars, inflation fears, and central bank purchases, which have all contributed to the price spike since 2020. He explains that this surge is typical, as gold often remains flat for long stretches before it experiences a sudden rally.advertisementThe Chartered Accountant said, 'So why has gold doubled since 2020? Because it had barely moved for 8 years before that. COVID, war, inflation fears, and central bank buying all triggered a sharp move — but remember: every sharp rally often comes after a lull.'However, Buddhadev does not advise against investing in gold, though. He acknowledges that it's a valuable asset, especially for diversification. Gold acts as a hedge during uncertain times, but it's not a consistent growth driver like stocks.He concluded his post by saying that though gold is a solid option for some, don't be fooled by its shiny surface. Limit your gold investments to 5% to 12% of your portfolio and always keep your approach grounded and balanced.Tune InTrending Reel