money manager said Gold, which briefly crossed $5,000 an ounce The mark is currently trading near $4,500 an ounce, while silver has risen from around $72 to around $77 an ounce earlier this year, reflecting resilient demand even after a short-term correction.
According to Emkay Wealth, the current rally in precious metals is different from previous cycles as it is being driven more by long-term allocation demand than speculative trading activity.
“Gold and silver are increasingly being viewed as strategic portfolio assets rather than short-term trading instruments. The current trend is driven more by structural allocation demand than speculative positioning,” the firm said.
MK Wealth said a weakening dollar on expectations of further rate cuts by the US Federal Reserve and increased appeal of non-yielding assets like gold could support bullion prices.
Meanwhile, silver is benefiting from rising industrial demand linked to clean energy and manufacturing sectors, while gold is attracting investors seeking diversification amid concerns over fiscal deficits and currency stability in major economies.
The firm expects gold to remain well supported below $4,000 an ounce, with an upside target of $4,800 and $5,200 an ounce in the medium term. For silver, it sees a rise to $92 and $110 an ounce in the medium term, although it cautioned that inflation trends, the pace of US rate cuts and dollar fluctuations could impact the trajectory of gains.
For investors, Emkay Wealth recommended maintaining existing allocations and using market corrections to deploy new capital. It said new investors should consider a phased approach rather than making lump sum investments at current levels.
The firm suggested a gold allocation of 5-10% depending on the risk profile of the investor, while for moderate investors the total exposure to precious metals could be between 10% to 15%. Conservative investors can keep the allocation low, while aggressive investors can smartly increase exposure subject to periodic portfolio review.
Vivek Choksi, senior vice president and zonal head-Ahmedabad, MK Wealth Management, said gold and silver should remain a part of diversified investment portfolios as de-dollarization trends among central banks and rising industrial demand provide structural support to the asset class.
He said that although the sharp gains seen in recent years may be waning, investors can still expect stable long-term returns from precious metals as part of a balanced asset allocation strategy.
MK Wealth advised investors to maintain a minimum investment horizon of three years to smooth out volatility and improve post-tax returns.
