Akshaya Tritiya is here but gold prices near Rs 1 lakh: Should you invest in gold this year or look at silver as an alternative?

Time of India

28-04-2025

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Reasons why gold prices are rising
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Is it the right time to buy gold on Akshay Tritiya?
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How can investors earn better returns from gold this Akshay Tritiya?
Is buying silver a better option than gold this Akshay Tritiya?
On April 22, 2025, gold briefly surpassed the Rs 1 lakh mark for the first time in India and is currently hovering around this milestone. As Akshaya Tritiya approaches in the next two days, which is considered an auspicious occasion to buy gold in India, the prices of the yellow metal might hit new highs. However, given the high prices, many are wondering if it is worth buying gold this year as well.ET Wealth Online explains why gold prices are rising, whether buying gold this Akshay Tritiya is a good idea, and what you can do for better returns.According to experts, gold prices are rising due to geopolitical reasons and US President Donald Trump 's unpredictable actions of imposing reciprocal tariffs on countries.Colin Shah, MD, Kama Jewellery, says, "The rise in gold prices is primarily influenced by the global economic uncertainties triggered by multiple events. The most important factor is Trump's tariffs and the US-China trade war. This, along with the turbulence from geopolitical tensions in the Middle East and Eastern Europe, has been the key concern, leading to a rise in gold as a safe investment haven across the globe, thus pushing up the gold price."Also Read: Can you sell old, un-hallmarked gold to buy new gold this Akshaya Tritiya? Concurring with Shah's view, Aksha Kamboj, VP, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures, says, "The recent surge in gold prices can be attributed to a combination of global economic uncertainty, rising geopolitical tensions, and a weakening rupee. In times of instability, investors naturally turn to gold as a safe-haven asset. Additionally, central banks worldwide, including in emerging economies, have been steadily increasing their gold reserves to hedge against inflation and currency fluctuations. These factors together have created sustained demand and upward pressure on prices."According to a report in The Economic Times, the Reserve Bank of India (RBI) bought 57.5 tonnes of gold in FY 2024-25. This was the second-highest level of gold purchase in any financial year by the central bank after it started accumulating in December 2017. As on March 31, 2025, the RBI's total gold stock was 879.6 tonnes.Naveen Mathur, Director-Commodities undefined a weaker dollar seen below 100 in the last few sessions has added to the momentum. Fundamentally, markets are pricing in increased geopolitical risks, fuelled by US trade tensions and stagflation concerns, which still have the potential to drive further gains for the yellow metal."The current environment suggests that trade-tariff wars and geopolitical concerns can further drive gold prices higher, unless there is a change in the situation, say experts. Hence, the question arises: should you invest in gold this year on Akshay Tritiya, like previous years?Deveya Gaglani, Senior Research Analyst-Commodities, Axis Securities, says, "For short-term investors, entering gold at current levels carries an elevated risk, given the nearly 30% rally year-to-date. However, we recommend a staggered buying approach for long-term investors, accumulating gold on dips - ideally in phases of 5-10% corrections."For many people, gold holds sentimental value. Shah says, "While the price is not much of a deterrent amid the gold-buying spree, the investment ticket size will probably shrink, given the landmark price rise of the yellow metal. However, gold still remains a lucrative asset class from the return on investment point of view, and people will look forward to this as a hedge against inflation."However, Mathur from Anand Rathi has a different view. "We still believe gold has room to rise further, up to 10-15% from the current levels of $3,800-3,850 per ounce in spot, translating to levels of Rs 1,05,000-1,08,000 per 10 gram in domestic futures markets in a time span of 3-6 months. Meanwhile, the current rally seems too fast, as the rise from Rs 90,000 to almost Rs 1 lakh took just 12 days, while the run from Rs 80,000 to Rs 90,000 took about 77 days, which indicates price corrections of up to 5-10 % are still possible in the near term, leading to volatility in prices," he says.Kamboj from IBJA says, "Akshaya Tritiya is a time for auspicious beginnings, and buying gold on this day is a tradition believed to bring prosperity. While prices are high, gold has always been considered a timeless asset in Indian households. Even small, symbolic purchases, whether in physical or digital form or gold ETFs, hold long-term value and cultural significance. In that spirit, buying gold today is as much about faith as it is about financial planning."Gold prices are at a record high. What can investors do now to get better returns from gold this Akshay Tritiya?Gaglani from Axis Securities says, "A parabolic move in gold prices happens once in a few years. Gold has always proved its mettle as the most secure asset when it comes to economic uncertainty, war, crisis, etc. It is an excellent tool for portfolio diversification, protecting investments against volatile market fluctuations. Therefore, we recommend buying gold ETFs to diversify your portfolio, as they are highly liquid, efficient, secure, and cost-effective."Kamboj says, "For better returns, investors should focus on a diversified approach to gold. Along with traditional physical gold, options like digital gold offer added benefits, such as interest income and ease of storage. Timing the market is always tricky, but consistently allocating a portion of one's portfolio to gold, especially during uncertain times, has proven to be a smart long-term strategy.""For people looking at long-term investment, gold can serve as an ideal asset class," says Shah. "Investors must bank on the opportunity to invest in gold wherever the price witnesses a dip. For short-term investments, people can also consider gold ETFs and gold mutual funds, as they also bring multiple benefits," he adds.Individuals who cannot buy gold due to high prices often buy other metals such as silver, copper, etc. Many prefer to buy silver coins or ornaments on Akshaya Tritiya.Will buying silver on this Akshaya Tritiya be a better option?Mathur from Anand Rathi says, "Akshaya Tritiya is always considered auspicious in India when buying gold or silver. However, gold has risen almost 21%, while silver returns are around 11-12 % year to date. Investing in silver with a long-term perspective of 1 year is likely a better option at current levels as compared to gold."Concurring with the view, Gaglani from Axis Securities says, "Gold has achieved an impressive return of over 25% this year, having seen significant gains. In contrast, silver is relatively more affordable now, as the gold/silver ratio is trading close to a multi-year high of 101. This suggests that gold may be approaching the overbought territory. Looking ahead, physical demand for silver is expected to rise in 2025 due to its essential role in solar panels, electric vehicles, 5G infrastructure, and semiconductor manufacturing. Furthermore, the global push for renewable energy is likely to increase demand, particularly from China and the US. Consequently, we anticipate that silver prices could deliver returns of more than 20-30% by the end of this year."