Gold price is up 23%. Will it go up further?

Gold has already gone up significantly. Will it go up further? - Anonymous

It's tempting to consider gold when it's been on a strong run — and yes, it has delivered around 23 per cent over the past year. But asking how much further it will climb is a question without a reliable answer. That's true for any asset class. Instead, it's more meaningful to look at what gold actually brings to your investment plan.

Gold performs well during uncertainty — when inflation rises, when there's geopolitical risk or when equity markets wobble. That's when it shines. But once the dust settles, its limitations become clear.

Over the last 15 years, gold has delivered an average return of around 10 per cent annually. In comparison, flexi-cap mutual funds , which invest across companies of different sizes, have delivered over 12 per cent over the same period. That gap may not seem huge, but over time, compounding makes a meaningful difference. More importantly, equities represent ownership in businesses that generate value, while gold simply stores it. Gold is not a long-term wealth builder.

That said, given its properties, one may consider it as a hedge and decide to allocate a small portion, say around 10 per cent of their portfolio for the same reason.

So, rather than chasing how high gold might go, use it thoughtfully — as a stabiliser, not a growth engine.

Also read: How to sell sovereign gold bonds before maturity & pay 0 tax

This article was originally published on April 11, 2025.