Gold prices have surged more than 40% since December 2024, fuelled by speculative long positions, strong ETF inflows, and a global shift toward safer assets in an uncertain economic climate. Driving this rally are worries about inflation, geopolitical tensions, and expectations that central banks may lower interest rates. Lower real yields tend to make gold more attractive.

For Indian investors, the timing is tricky. The current elevated levels provide good gains, but entering now brings risk of short-term correction. Physical gold remains popular, but storage, purity and tax implications matter. Alternatives like Sovereign Gold Bonds (SGBs), gold ETFs, digital gold or derivatives offer different risk-return profiles.

Analysts suggest keeping a balanced exposure depending on one’s investment horizon and risk appetite. If you believe macro risks will persist, holding gold can hedge against inflation and currency weakening. If instead you expect tighter monetary policy or stronger currencies, being patient for dips may offer better entry points. Keeping an eye on upcoming central bank decisions, currency trends, and global demand/supply dynamics is key.