As Gold Nears ₹1 Lakh, Should You Trust the Hype or Brace for a Reality Check?
As gold prices edge closer to the ₹1 lakh per 10 grams milestone once again, Chartered Accountant Nitesh Buddhadev has urged investors to stay cautious and maintain a long-term perspective rather than getting swayed by recent headlines.
Mumbai: As gold prices edge closer to the ₹1 lakh per 10 grams milestone once again, Chartered Accountant Nitesh Buddhadev has urged investors to stay cautious and maintain a long-term perspective rather than getting swayed by recent headlines.
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“Gold Doesn’t Always Glitter,” Warns Buddhadev
In a widely shared LinkedIn post, Buddhadev highlighted that despite the recent excitement over gold’s rally, the precious metal has delivered nearly flat returns over extended periods in the past. “Gold doesn’t always glitter: It gave almost zero returns for 8 years,” he wrote, urging investors to “zoom out” and look at long-term performance rather than reacting to short-term surges.
Minimal Returns Over Key Decades
Buddhadev backed his caution with historical data. Between 2012 and 2019, gold prices in India moved from ₹31,050 to ₹35,220 per 10 grams—just a 13% gain over 8 years, or under 1.5% annually. He pointed out a similar stagnation from 1992 to 2002, when gold rose from ₹4,334 to ₹4,990 per 10 grams, offering similarly low annual returns.
Sudden Surge Attributed to Global Crises
The Chartered Accountant explained that gold typically remains flat for extended periods, followed by sudden rallies triggered by global events. The recent doubling of gold prices since 2020, he said, can be attributed to events like the COVID-19 pandemic, geopolitical tensions, inflation concerns, and increased central bank gold buying.
“Every sharp rally often comes after a lull,” Buddhadev noted, cautioning investors not to assume consistent returns based on recent performance alone.
Gold is a Hedge, Not a Growth Engine
While not discouraging investment in gold entirely, Buddhadev emphasized that gold should be viewed as a hedge during uncertain times, not as a primary growth asset. Unlike equities, it does not provide consistent returns and should therefore be treated as a diversification tool.
Balanced Investment Strategy Recommended
Concluding his message, CA Nitesh Buddhadev advised limiting gold investments to 5%–12% of an individual’s portfolio. He reiterated the importance of a balanced and grounded approach to investing, saying, “Though gold is a solid option for some, don’t be fooled by its shiny surface.”
His insights come at a time when many retail investors are considering jumping into the gold market, lured by the metal’s recent rally.
