Cautious on Gold, bullish on Silver in 2026: What DSP advises investors

Hold on to some gold, but don't chase prices higher. Use dips below US$3,700/oz to add. Consider increasing exposure to silver ETFs or mutual funds as a tactical play.

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Gold investors have had a dream run — but it may be time to pause and take stock. According to DSP Asset Managers’ Netra October 2025 outlook, gold has now rallied to its fair valuation zone, trading around US$3,895/oz, slightly above the modelled midpoint of US$3,825/oz. That marks gold’s strongest run since 1979, driven largely by central bank buying, a weaker U.S. dollar, and global political uncertainty.

 

For investors, the message is clear: stay invested, but turn cautious.

 

Gold: Rally Matures, Time to Trim

 

DSP’s theoretical price model — based on global money supply — suggests gold’s fair value lies between $3,166 and $4,484 per ounce. At current prices, the metal has moved into the upper end of that range. Historically, gold can trade as much as 40% above fair value, but such peaks leave little “margin of safety.”

 

The report notes that while the bull market remains intact, short-term pullbacks are likely. Investors sitting on hefty gains could consider gradually reducing exposure, trimming 5% per week until half of their overweight position is cut — effectively selling into strength between US$3,860 and US$4,000.

 

In rupee terms, gold has delivered a 47% year-to-date return in 2025, outperforming most equity indices globally. Its 10-year CAGR now approaches equity-like returns, a rare occurrence for a non-yielding asset. But with returns converging, analysts advise rebalancing portfolios to avoid concentration risk.  Gold is now outperforming ALL major equity markets across the world. A big feat for a non-yielding asset 

Gold is now outperforming ALL major equity markets across the world. A big feat for a non-yielding asset.

  The gold bull market seems far from over, but it may pause for an extended period, and meaningful pullbacks could offer chances to add: DSP 

How To Approach Gold & Silver- Time To Be Conservative?

 

Silver: The Underowned Opportunity

 

Unlike gold, silver still has room to run. DSP estimates its theoretical fair value in the range of US$53–75 per ounce, with a midpoint near US$64 — meaning the metal, currently around US$47, remains undervalued.

 

Silver’s catch-up potential stems from its dual role as both a precious metal and an industrial commodity — a beneficiary of clean energy, electronics, and solar demand. Historically, gold-to-silver ratios above 80 have signaled value in silver; the current ratio of 85:1 supports this view.

 

For retail investors, that makes silver an attractive tactical opportunity within a precious metals allocation, particularly through silver ETFs or mutual funds.

 

What This Means for Your Portfolio

 

DSP’s takeaway is pragmatic:

 

Stay invested in gold but avoid adding at current levels.

 

Take partial profits and hold dry powder for dips below the US$3,700/oz mark.

 

Add silver on corrections, especially if the gold-to-silver ratio stays above 80.

 

Avoid overexposure to gold miners, which no longer offer attractive risk-reward.

 

Gold’s long-term value as a store of wealth and hedge against geopolitical and currency risk remains intact — but the easy money has been made. Silver, on the other hand, could be the next leg of the metals story in 2026.

 

“When the trend is kind to your portfolio but the margin of safety is eroded,” the DSP report advises, “say thank you, but no thank you.”