Gold, silver slide after rally: Experts explain buy, hold or book profit

'Buy, hold or book profits should be based on allocation, not emotion,' say experts

Gold and silver prices have corrected sharply after a steep rally, leaving many retail investors unsure whether to buy the dip or cut exposure. Experts say the decision should be driven by portfolio allocation and discipline, not panic or momentum.

 

Recent data shows gold and silver ETFs have seen steep weekly losses after outsized one-year gains, signalling what experts describe as a normal correction after a speculative run-up.

 

What should investors do after the fall?

 

Arjun Guha Thakurta, executive director, Anand Rathi Wealth Limited, says investors should first look at the cause and scale of the fall, not just the price move. He notes that precious metals often witness 20–30 per cent drawdowns after strong rallies and the latest decline followed unusually high returns over the past year.

 

 

“The decision to buy, hold, or book profits should be based on allocation, not emotion,” Thakurta says. He adds that if metals exposure drifts away from the intended portfolio weight, investors should rebalance gradually rather than react abruptly.

 

Prathamesh Mallya, DVP–research, non-agri commodities and currencies, Angel One Ltd., suggests using correction bands as signals. An 8–12 per cent fall in gold and 15–20 per cent in silver can justify staggered buying if allocation drops below target, while a rebound that pushes exposure 2–3 percentage points above plan may warrant partial profit-booking.

 

Example: In a Rs 10 lakh portfolio with 10 per cent in metals, if a correction pulls the value down to about Rs 75,000–Rs 90,000, investors can add in phases to restore target weight instead of exiting.

 

Gold vs silver: Different roles

 

Experts draw a sharp distinction between the two metals.

 

Thakurta says gold behaves as a long-term stabiliser, while silver is highly cyclical and volatile, with inconsistent return patterns. He indicates gold can form a meaningful hedge allocation, while silver is better avoided as a strategic core holding.

 

Mallya recommends capping gold at roughly 5–10 per cent of the overall portfolio with a three-to-seven-year horizon. Silver, he says, should remain tactical at about 2–5 per cent with a shorter one-to-three-year view and active profit-taking during rallies.

 

How to invest now?

 

Both experts favour staggered buying over market timing.

 

“SIP or phased buying reduces timing and emotional risk,” Mallya says, adding that retail investors can track broad dollar and interest-rate trends and the gold–silver ratio rather than complex signals.

 

On investment routes:

 

·  Thakurta prefers gold ETFs for liquidity, transparent pricing, and lower friction costs

 

·  Mallya says sovereign gold bonds suit long-term holders due to interest income and tax-free maturity gains

 

·  Both advise avoiding heavy physical gold buying due to making charges and storage issues

 

·  For silver exposure, ETFs are the most practical vehicle, according to Mallya

 

The common message- rebalance, stagger, and treat gold and silver differently within the portfolio.