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Financial experts are urging investors to cash out their profits from gold and silver investments following unprecedented gains over the past 18 months. Both precious metals have more than doubled in value, with gold rising over 100 per cent and silver surging nearly 200 per cent in rupee terms. However, wealth managers warn that the current market conditions may not support further significant growth.The remarkable rally in precious metals was driven by multiple factors. These include growing geopolitical tensions, aggressive US trade policies, inflation concerns, and continued buying by central banks. Silver’s exceptional performance was further boosted by its increasing industrial applications in solar panels, electric vehicles, and AI-related technologies.Indian investors, seeking alternatives to the underperforming equity market, have poured record amounts into gold and silver schemes. January marked a historic shift as monthly inflows into precious metal ETFs reached ₹33,503 crore, surpassing equity fund investments of Rs 24,029 crore for the first time.“If you bought gold and silver over the past year and a half, this is the time to take profits and be a fence sitter,” advised Sahil Kapoor, head of Products and market strategist at DSP Mutual Fund, as quoted by ET. This comes as international silver has fallen 36.63% and gold has dropped 7.8% from their peak levels in January 2026.However, experts like Akshay Chinchalkar, managing partner at The Wealth Company, suggested a cautious approach. “Precious metals are priced to perfection after the sharp run-up in prices we saw over the last couple of years,” he said. Instead of large lump-sum investments, he recommended using Systematic Investment Plans (SIPs) to gradually build gold exposure.For new investors feeling the FOMO (Fear of Missing Out), Kapoor recommends starting with small, systematic investments rather than making substantial allocations at current price levels. This measured approach could help minimise risks while maintaining some market participation.
Gold, silver pushes trade deficit
In a separate development around the precious metals, trade deficit widened to a three-month high of $34.6 billion in Jan as gold and silver shipments pushed up the import bill, while exports remained flat on a sharp fall in goods consignments to the US.India’s imports rose 19.1 per cent, the highest since last April, to $71.2 billion, the second highest for any month. Gold imports surged 4.5 times to $12 billion, while silver jumped 2.3 times to $2 billion. During January, exports were up 0.8 per cent to $36.6 billion amid a fall in gems and jewellery and textiles, while electronics and pharma saw a muted increase.Govt is, however, confident of closing the year with record exports. “India’s exports remain northward, both for goods and services. We hope that in the last two months too it will be on the same trajectory. We are well poised to be nearing $860 billion this year, and services are expected to cross $410 billion for the first time,” said commerce secretary Rajesh Agrawal.A part of the confidence stems from a revival in US demand in sectors such as gems and jewellery and textiles after the punitive 25 per cent secondary tariffs were withdrawn at the start of February.Read more: Gold, silver imports push trade deficit to 3-month high(Disclaimer: Recommendations and views on the stock market and other asset classes given by experts are their own. These opinions do not represent the views of The Times of India)
