Speaking to CNBC-TV18, Srivastava said investor behaviour around gold has undergone a noticeable shift. “When we used to talk two years back, we spoke about gold as a risk diversifier… I think that conversation has now shifted to gold as a value creator,” he said, adding that investors are now looking at precious metals not just for stability but also “for earning quick returns through tactical and short-term allocation.”
The shift comes at a time when gold prices have seen a sharp rally over the past year, followed by heightened volatility in recent weeks. Traditionally associated with steady accumulation during festive periods such as Akshaya Tritiya, gold has instead witnessed sustained buying through the year as prices surged, alongside increasing participation through financial instruments like ETFs and digital gold.
Vijay Kuppa of InCred Money pointed to changing investor behaviour during the rally. “Ever since the October rally, people came in, and in fact volumes spiked, unfortunately when the market was at the top,” he said. He cautioned that retail investors tend to chase performance, even as he reiterated the importance of a counter-cyclical approach and portfolio diversification.
Kuppa outlined three key drivers for gold: jewellery demand, central bank buying, and investment demand. While the first remains structural in markets like India, central bank purchases have emerged as a significant force in recent years, alongside rising investor interest as prices climb. However, he noted that recent price corrections, despite ongoing geopolitical tensions, were driven more by liquidity needs than fundamentals. “When fund managers and institutions needed liquidity, they went to the asset they could liquidate, which was gold,” he said.
Flows into exchange-traded funds also reflect this behavioural shift. According to Srivastava, inflows into gold and silver ETFs surged, with a combined ₹30,000 crore entering the segment at the peak in January. While gold continues to see strong allocations, silver has witnessed higher trading activity, indicating a growing appetite for tactical bets among investors.
Tapan Patel of Tata Asset Management said the role of gold in portfolios has evolved over time. “We have seen this role shift from being merely a diversifier… to becoming a core asset allocation,” he said, noting that investors are increasingly moving from physical gold to more flexible formats such as ETFs and digital gold, allowing quicker portfolio adjustments.
Patel added that while short-term volatility is likely to persist amid geopolitical tensions and shifting global macro conditions, the long-term outlook for gold remains constructive. Factors such as sustained central bank buying, concerns around US debt, and broader shifts in the global economic order continue to support the asset class structurally.
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Even so, rising participation from both retail and institutional investors, along with increased trading activity, is contributing to higher volatility. Srivastava noted that volatility levels in gold and silver have risen significantly compared to historical averages, and could remain elevated if current investor behaviour continues.
As gold transitions from a passive hedge to an actively managed allocation, experts suggest investors will need to balance tactical opportunities with long-term discipline, particularly in a market that is becoming increasingly sensitive to both global liquidity cycles and investor sentiment.
First Published: Apr 23, 2026 6:10 PM IST