With gold prices near all-time highs, investors are facing a familiar dilemma: whether to follow tradition or wait for better entry points. Market outlook by Axis Direct suggests limited near-term upside with potential volatility, reinforcing gold’s role as a hedge rather than a return-generating asset in portfolios.
Volatility likely despite strong long-term trend
Gold has delivered strong returns over the past few years, supported by inflation concerns, geopolitical uncertainty and steady central bank buying. However, after hitting record highs in 2026, the metal has shown signs of cooling, with analysts at Axis Direct expecting a phase of consolidation and short-term volatility.
2026 so far: A “stress test” year for gold
Gold saw extreme volatility in Q1 2026
Prices:
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Peaked near $5,500–$5,600/oz in January -
Fell sharply to around $4,100/oz in March -
This sharp correction is described as a “stress test” for gold markets -
Meaning: Gold is not moving in a straight rally—it is entering a volatile phase
Long-term performance: Strong and consistent
Over the last decade (2016–2026):
Gold delivered 18% CAGR returns
Example:
₹100 invested in gold → ₹527 today
Outperformed equity benchmark returns in the same period
Key takeaway:
Gold is a long-term compounding asset, but with cycles
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2026 outlook: 10–15% upside expected -
Axis Direct expects: -
10–15% upside from current levels -
Price targets: -
Global (COMEX): $5,300–$5,500/oz -
India: ₹1,70,000–₹1,85,000 per 10g
Interpretation:
Upside exists
But not immediate → likely after consolidation
Gold has delivered strong performance over the past decade, generating a compounded annual return of nearly 18%.
According to a recent commodities insight report by Motilal Oswal Financial Services, gold prices have risen nearly 10% so far in 2026, even as the journey remains volatile with sharp swings through the first quarter.
The report highlights that gold is currently being driven by multiple global factors, including geopolitical tensions, concerns around slowing economic growth, and uncertainty around interest rate movements in the United States. While these factors are supporting gold’s safe-haven appeal, periods of a stronger dollar and elevated bond yields have created intermittent pressure, resulting in a non-linear price trajectory.
“Gold is currently navigating a complex global environment. While there are phases of pressure due to interest rate expectations and currency strength, the broader outlook remains supported by uncertainty, inflation concerns, and long-term investment demand. For Indian investors, gold continues to serve as a reliable store of value, especially during periods of volatility,” said Navneet Damani, Head of Research – Commodities, Motilal Oswal Financial Services.
On the demand front, the report points to contrasting trends across key markets. In India, elevated prices have kept jewellery demand subdued and price-sensitive, leading to discounted domestic prices. In contrast, China has witnessed relatively stronger, investment-led demand. The report also notes a gradual shift in India towards financial forms of gold such as ETFs, reflecting evolving investor behaviour.
Citing data from the World Gold Council, the report by Motilal Oswal states that central banks purchased around 860–870 tonnes of gold in 2025, marking continued strong buying, though at a slower pace than previous years. At the same time, global ETF demand has seen a recovery after earlier outflows, with mixed but constructive trends continuing into 2026.
” Gold may continue to trade within a broad range in the near term as markets adjust to evolving global cues. While some consolidation is likely after the recent rally, the medium- to long-term outlook remains constructive. Factors such as geopolitical risks, slowing global growth, and the possibility of monetary easing later in the year could support prices, while persistent inflation, a stronger dollar, and weak physical demand may act as near-term headwinds. The report maintains a clear “buy on dips” stance for investors with a medium- to long-term horizon, said Navneet Damani, Head of Research – Commodities and Manav Modi, Analyst Commodities, Motilal Oswal Financial Services.
Why gold still deserves a place in your portfolio
Despite the near-term uncertainty, gold acts as a hedge against inflation and market volatility, often performing well when equities come under pressure.
Financial planners typically recommend allocating 5–10% of a portfolio to gold, not for high returns, but for stability and diversification.
Akshaya Tritiya buying: sentiment vs strategy
In India, Akshaya Tritiya is considered an auspicious occasion to buy gold, driving a seasonal spike in demand. However, with prices currently elevated, experts caution against making large, lump-sum purchases purely based on tradition.
Instead, investors may benefit from aligning festive buying with financial goals, rather than treating it as a one-time investment decision.
Smarter ways to invest in gold
With physical gold becoming expensive, many investors are shifting toward financial gold instruments, which offer better efficiency and transparency:
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Gold ETFs and gold mutual funds -
Sovereign Gold Bonds (SGBs) -
Digital gold for small-ticket, flexible investments
These options eliminate making charges, offer easier liquidity, and are better suited for long-term portfolio allocation.
What investors should do now
Given the current market conditions, a staggered approach may work better than lump-sum investing.
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Avoid chasing prices at peak levels -
Consider spreading purchases over time -
Stick to a disciplined allocation of 5–10%
“In near term, gold could consolidate in a broad range, however we continue to maintain a buy on dips stance for medium to longer term perspective with the target of $6000 i.e. Rs. 1,85,000 on domestic front,” said the Motilal Oswal report.