Is it safe investing in gold? what US expert predicts...

Investing in Gold: The price of this precious metal has recently reached record highs — crossing ₹90,000 per 10 grams in India and over $3,100 per ounce globally. While this has made gold investors happy, it’s becoming a burden for buyers. So, should you invest in gold? Let's give you a lowdown on whether investing in gold would be prudent for you. 

But, a Morningstar analyst from the US, John Mills, has predicted that gold prices could fall sharply by around 38% in the coming years. He predicted the global gold price may drop from $3,080 to about $1,820 per ounce. If this happens, gold could fall to ₹56,000 per 10 grams in India.

Investing in Gold Right or Wrong?

The current situation raises questions. Prices are at an all-time high, but will they stay that way? Let’s explore some key reasons that suggest gold might not be a safe bet going forward.

1. More Gold in the Market (Increased Supply):
Gold mining has become more profitable, and production has gone up — especially in countries like Australia. Global gold reserves have also grown by 9%. Even recycled gold has increased, adding to the supply.

2. Less Buying (Falling Demand):
Many central banks had bought gold in large amounts last year (1,045 tonnes), but now a majority (71%) are either planning to buy less, according to a survey. It is a concern for gold investors.

3. Market Is Full (Saturation):
In 2024, deals and mergers between gold companies rose by 32%. This can be a signal that gold prices might have peaked.  More people are investing in gold through ETFs, which has happened before big price drops in the past.

Increased supply, reduced central bank buying, and signs of market saturation are factors worth considering. Investors should weigh the risks before putting all their hopes in gold. Diversifying your investments may be a smarter move in 2025

Current Scenario of Gold in India

Gold prices in India are currently hovering around ₹90,000 per 10 grams for 24-carat gold, marking an all-time high. This surge is driven by global economic uncertainty, inflation, and safe-haven demand. However, analysts remain divided—some predict a further rise, while others warn of a sharp correction ahead.

But There’s Another Side to the Story

Bank of America believes that gold prices could rise to $3,500 per ounce within the next two years, driven by ongoing global uncertainty, central bank policies, and long-term investment trends.

Goldman Sachs is also optimistic. The firm expects gold to remain strong and end this year around $3,300 per ounce, suggesting that the current high levels may not be the peak after all.

These predictions reflect the belief that gold will continue to be a safe-haven asset amid inflation concerns, geopolitical risks, and fluctuating global markets.  

Is it safe to invest in gold now? 

While gold has always been seen as a "safe haven" during economic uncertainties. It’s now a wait and watch situation. Most of the analysts give contradictory predictions. While some predicted that prices will keep on increasing, others say that there will be a crucial dip in the prices. The coming month will be crucial in deciding whether or not to invest in gold.  It will be interesting to see how gold prices actually move in the months ahead. Though gold remains a traditional choice for wealth preservation, the current signs suggest caution.