Consider buying gold, silver as correction takes root

Samvat 2081 delivered the strongest returns in three decades for gold and silver.

- RAJESH BHAYANI

At Monday’s close, gold prices in Mumbai were up 60.4 per cent, while silver surged 68.7 per cent compared to the closing price at the end of the Samvat 2080.

As Samvat 2082 begins, optimism persists — though sharp swings are expected in both precious metals as investors book profits.

‘The extraordinary bull run has been driven by several forces, led by the debasement of the US dollar. Yet, the relentless rally and all-round buying have pushed both metals deep into overbought territory.

Gold and silver have drawn strength from their safe-haven appeal amid the US government shutdown, aggressive central bank purchases, and unrelenting investment demand. Market experts warn, however, that an anticipated correction could unsettle new entrants.

“Recent entrants, if they continue to hold a long-term view, could get over any near-term retracements and corrections that are expected to be sharp... Friday night’s sharp correction in silver was a classic example of what lies ahead for late bloomers,” said Gnanasekar Thiagarajan, head, Commtrendz Research.