Will Gold and Silver prices fall? Here’s what experts say, How much to buy, and smart strategy to follow

With the festive season approaching, many investors are considering adding gold and silver to their portfolios. Prices of precious metals have surged over the past year, raising questions about downside risk, allocation, and the best investment options.

On Zee Business’ Money Guru show, experts Pooja Bhinde and Harshvardhan Roongta shared their insights on whether it’s the right time to invest in gold or silver, how much to allocate, and which investment vehicles to choose, including ETFs and mutual funds.

Understanding Risk and Downside Protection

Add Zee Business as a Preferred Source

Investors often wonder, “If I buy gold or silver today, what’s the worst-case scenario?”

Harshvardhan Roongta explained that gold has strong support near Rs 100,000 per 10 grams, while current prices are around Rs 125,000 per 10 grams. He noted that a correction of 10–15 per cent is possible.

“The problem is not if a correction will happen, but when. Prices might dip 10 per cent immediately, or rise another 10–15 per cent before falling. Anyone claiming to know the exact timing is guessing,” he said.

Investors should consider this, especially as gold has delivered 65 per cent returns in the past year.

Silver has been the standout performer. Harshvardhan highlighted that over the past year, silver delivered 96 per cent returns, with 90 per cent of gains in the last six months and 40 per cent in the past month alone.

“Silver’s price growth is closing the Gold-Silver ratio gap, currently at 80:1. Ideally, it should be 65:1, indicating another 20 per cent potential upside in silver relative to gold,” he explained.

However, he cautioned that silver is now in a speculative phase. Physical supply is low, premiums are around 20 per cent above spot prices, and corrections could be sharper than in gold.

Both experts agreed on a balanced approach. Harshvardhan suggested a 70 per cent allocation in gold and 30 per cent in silver for precious metals. Metals should make up 10–15 per cent of the total portfolio.

Pooja Bhinde added, “Gold remains the first preference, especially during festivals. It is a haven and a hedge against inflation. Silver has excellent potential, but current gains are mostly demand-driven rather than industrial use.”

Experts recommend ETFs and mutual funds over physical purchases. Gold ETFs are easier to manage, can be traded via Demat accounts, and provide better liquidity.

Pooja Bhinde explained, “There are funds like Edelweiss Gold and Silver Fund and a few AMC offerings that follow a 70:30 ratio. If you don’t want to take separate gold and silver funds, this is a convenient option.”

She added that this approach is particularly useful now, as silver entry is limited.

For a balanced portfolio, experts recommend multi-asset allocation funds that invest in equity, debt, gold, and silver.

Pooja suggested, “Funds like Nippon India Multi-Asset Allocation Fund, ICICI Multi-Asset Fund, and White Oak Multi-Asset Fund automatically balance your investments. Typically, they allocate 10–25 per cent to commodities, giving exposure without over-concentration.”

When it comes to gold, ETFs are preferred. Pooja Bhinde said, “Gold ETFs are always better than buying physical gold. They are easier to manage, tradable on your Demat account, and more liquid.”

Experts recommend Nippon India Gold ETF, ICICI Prudential Gold ETF, Kotak Gold ETF, and SBI Gold ETF for their large AUM and better price discovery.

Silver funds have seen high demand, limiting new investments.

Harshvardhan Roongta noted, “Some funds like DSP Silver Fund are still open for SIPs without restrictions. Nippon India Silver Fund and HDFC Silver Fund are accepting investments, but with a Rs 1 lakh per PAN per day limit. Major funds like Kotak, SBI, UTI, and Tata Silver Funds have currently paused fresh inflows.”

Both experts agreed on a balanced allocation. Harshvardhan Roongta recommended, “If you invest in precious metals, consider 70 per cent gold and 30 per cent silver.

Overall, metals should be 10–15 per cent of your total portfolio.” Pooja added, “Using combination funds, ETFs, or multi-asset funds helps diversify risk while participating in gold and silver growth.”