With Akshaya Tritiya approaching, many potential buyers are pondering whether the recent fall in gold prices presents a golden opportunity to purchase the precious metal. As of April 2025, spot gold has fallen by 0.4%, reaching USD 3,302.58 per ounce, while US gold futures have dropped by 0.7%, now standing at USD 3,310.70. In India, this time of year is traditionally one of the best for buying gold, due to both its cultural significance and its role as a long-term investment.
Why Are Gold Prices Falling?
Gold prices have been under pressure due to several global factors:
Stronger US Dollar: A strengthening dollar has made gold more expensive for buyers using other currencies, dampening demand. The US dollar’s rise can suppress the appeal of gold, a commodity typically traded in USD.
Easing Global Trade Tensions: As trade disputes, particularly between the US and China, show signs of easing, the demand for safe-haven assets like gold has waned. With geopolitical risks perceived to be lowering, investors may shift away from gold to riskier assets.
The Rising Popularity of Gold in India
In India, Akshaya Tritiya is viewed as an auspicious day to buy gold, with many seeing it as a day that brings prosperity. Over the years, gold has become a trusted asset, offering stability amid market volatility. But with prices now nearing ₹96,000 per 10 grams, the high cost has raised questions about whether it’s worth investing at this time.
Dr. Renisha Chainani’s View on Gold Investment
Dr. Renisha Chainani, Head of Research at Augmont, provides a valuable perspective on gold’s long-term appeal. She notes that over the last 20 years, gold has delivered a 15% compounded annual growth rate (CAGR), a robust return compared to many other investment options. Gold’s role as a hedge against inflation, currency depreciation, and geopolitical uncertainty further cements its place in an investor’s portfolio.
Despite the current high price of gold, Dr. Chainani believes Akshaya Tritiya remains a great time to buy, not only due to the cultural significance but also because of gold’s role in balancing an investment portfolio. “Gold has the potential to remain strong, especially as global uncertainties persist and interest rates are expected to be cut in the US,” she adds.
Current Gold Market Dynamics
Several factors continue to drive gold prices:
Geopolitical Tensions: Conflicts such as the Russia-Ukraine war and Middle East unrest have increased gold’s appeal as a safe-haven investment.
Global Inflation: Rising inflation has motivated investors to flock to gold as a protective asset.
Central Bank Purchases: Countries like India and China have been boosting their gold reserves, further supporting demand for the metal.
However, the current price surge could slow down or even reverse if geopolitical tensions ease further or if the US Federal Reserve raises interest rates faster than expected. Such moves could shift investments away from gold and back into higher-risk assets like stocks.
Should You Buy Gold Now?
While buying gold during Akshaya Tritiya is traditionally seen as a good move, experts recommend caution this year due to the record-high prices. To navigate this volatile market, here are some strategies:
Smaller, Planned Purchases: Instead of making a large, one-time investment, consider spreading out purchases over time through Gold SIPs (Systematic Investment Plans) or digital gold. This approach allows investors to buy gold in small increments, reducing the impact of price fluctuations.
Gold ETFs or Mutual Funds: These alternatives provide easy access to gold without the need to buy physical gold, and they are gaining popularity due to their transparency and convenience.
Small Coins or Light Jewellery: If you prefer physical gold, consider buying smaller coins or lightweight jewelry, which carry lower making charges and are easier to sell later.
Long-Term Perspective: Regardless of short-term price movements, it is essential to view gold as a long-term investment. For meaningful returns, holding gold for at least 3 to 5 years is recommended.
Insights from Aksha Kamboj
Aksha Kamboj, Vice President of the Indian Bullion and Jewellers Association (IBJA), highlights that despite short-term fluctuations, gold remains a reliable asset in uncertain times. “While there might be a possibility of short-term price correction, gold will continue to remain a safe-haven asset,” she concludes.
Conclusion
While the recent drop in gold prices could provide a window for buyers, the ongoing geopolitical uncertainties and expectations of potential interest rate cuts in the US suggest that gold may retain its appeal in the near future. For investors, Akshaya Tritiya presents an opportunity to buy, but it’s important to approach the market strategically—considering smaller investments, diversifying with gold ETFs or SIPs, and maintaining a long-term perspective on the yellow metal’s value.
If you are looking to invest in gold this Akshaya Tritiya, remember that it’s not just about the price but about adding a stable and valuable asset to your portfolio for the long run.
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