Akshaya Tritiya: Tapan Patel on why you shouldn’t let the recent dip in gold scare you

Edited excerpts from a chat:

A lot of investors were left baffled when gold and silver prices fell during the war. Is it only because investors treated the dollar as a safe haven asset rather than precious metals?

We have seen nonlinearity between asset classes from the conventional price behaviour in recent years. Gold and silver, in general, tend to rise in times of market uncertainties like war-like situations. However, gold and silver prices witnessed decline during the war over multiple factors starting with negative correlation with the dollar with rise in oil prices. The fall in equity markets later called for liquidation in gold silver positions. The expectations of higher for longer interest rates from the US Fed added pressure to the bullion prices by March end with rise in US treasury yields.

With Akshaya Tritiya approaching, how should investors balance the cultural inclination to buy gold with current valuations and market dynamics?

Akshaya Tritiya has been considered one of the auspicious days to start something new. People tend to buy gold on this day, considering it a good omen for long term prosperity. Gold prices are down by approx. 16% (as on 15th April 2026, Bloomberg) from recent highs over macro factors. The global market dynamics are still uncertain which may lead to persistent volatility. The structural factors are still in play and supportive for gold prices for long term. Investors may consider this market correction to rebalance their portfolio with products like Gold ETFs, Digi Gold or Multi Asset Mutual Fund scheme apart from physical gold after careful evaluation.

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In your recent note, you argued that central banks have only slowed down the pace of gold buying and not doing a full reversal. Do you think central bank buying will resume again?

Global central banks started gold buying post 2008 GFC (Global Financial Crisis) and we have seen a rise in the pace of buying gold with average central bank gold reserves reaching to 30% from 20% in the last five years. Central banks’ gold buying is also price sensitive and prone to market volatility. We have seen a slowdown in central bank gold buying in 2025 and in 2026 with Russia and Turkey turning net sellers for the period. (Source: World Gold Council) We believe central banks may resume gold buying going forward over structural change in market dynamics.

Within a diversified portfolio, would you recommend increasing allocation to gold and silver amid geopolitical tensions and the correction that we have seen in both precious metals as well as equity? Is 20% allocation from a 5-year view good enough?

We have seen a drastic change in market dynamics and broken cross asset correlations amid a multi polar world. A multi asset portfolio may help investors during high volatility and uncertain market scenarios. We believe allocation of 15-20% in gold and silver with higher exposure to gold in the portfolio may help investment during the external market volatility rising from global geopolitical tensions and macro uncertainties.

Given the sharp correction in gold prices driven by a stronger dollar, rising yields, and ETF outflows, how should investors interpret this phase? Is this a cyclical reset or structural shift?

Any asset class may react to change in cyclical factors like macro factors and liquidity scenario. The recent correction in gold prices may be considered as a cyclical reset to align prices with market fundamentals and cross asset rebalancing after record rally in the prices.

For Indian investors, how big a tailwind can the rupee depreciation be when it comes to gold and silver?

Rupee depreciation has always been a supportive for gold and silver price performance in India being one of the largest importers of bullion. Gold and Silver prices gain support from rupee depreciation in times of fall in global prices due to stronger dollar. This scenario we have witnessed historically in 2013-2015 when gold and silver prices in India fell lesser than fall in international prices. This is a big tailwind for the investors in India with dual advantage.

Silver’s dual role as both a monetary and industrial metal adds complexity. How should investors calibrate exposure given its higher sensitivity to economic cycles?

Silver prices historically have always been performed similar to gold prices being a precious metal. The industrial use of the silver has increased in last few years which has drawn attention of the global investors. Investors should understand the basic characteristics and market fundamentals of gold and silver. Gold has earned ‘currency status’ and prices move with global macro dynamics and volatility. Silver usage as an industrial metal is cyclical in nature and more data dependant. Investors may consider gold as a long-term investment avenue while silver may be considered as a cyclical/tactical trade as per supply-demand fundamentals.