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Gold prices have corrected more than 20% from their peak on the MCX, raising a pertinent question: Is it the right time to buy, or should one stay on the sidelines?

MCX gold April contracts fell to ₹1,52,719 per 10 grams in intraday trade on Wednesday, February 18. This marks a drop of over ₹40,000, or nearly 21%, from its record high of ₹1,93,096 per 10 grams.

MCX silver March contracts, on the other hand, have crashed by nearly ₹1,88,000, or 45%, from their peak of ₹4,20,048 per kg.

Most experts believe gold and silver prices may remain volatile in the near term amid geopolitical developments, the dollar's movement, and expectations surrounding the US Fed interest rate trajectory.

Hareesh V, the head of commodity research at Geojit Investments, underscored that gold and silver have enjoyed strong multi‑year rallies, but the medium‑term outlook now appears choppy with a mild positive bias.

"Gold’s upside remains supported by sustained central‑bank demand, geopolitical uncertainty, and expectations of lower real interest rates, which major institutions see keeping prices well‑supported even after recent volatility," said Hareesh.

Given this backdrop, Hareesh says accumulating gold on corrective declines remains a sensible strategy.

"Intermittent pullbacks are a part of a healthy consolidation phase before the next leg higher. Hence, a disciplined, staggered accumulation approach helps manage valuation risk while benefiting from gold’s structural drivers," said Hareesh.

Silver, however, demands greater caution. Hareesh pointed out that its industrial linkage creates higher volatility and wider forecast ranges, with 2026 estimates varying dramatically.

"While the long‑term trend remains bullish due to persistent structural deficits and rising industrial use, accumulation should be done in small tranches during corrections, avoiding large single‑block buys. More sharp corrections are possible, but over the long run, both metals retain a strong bullish foundation," said Hareesh.

Vandana Bharti, the head of commodity research at SMC Global, highlighted that gold remains underpinned by steady central bank buying, ongoing geopolitical uncertainty, elevated global debt levels, and the growing possibility of rate cuts in the second half of 2026. These factors provide a constructive backdrop, even though prices may remain volatile along the way.

Silver, on the other hand, has a dual character. While it shares gold’s monetary appeal, it is also heavily influenced by industrial demand. That means economic performance plays a much bigger role in silver’s trajectory, Bharti noted.

According to Bharti, if global growth improves, silver can outperform gold. But during economic slowdowns, it tends to be more volatile and can underperform.

At present, silver demand is at record highs, and the market is heading toward a sixth consecutive year of supply deficit — a factor that lends structural support to prices, Bharti observed.

Bharti recommends that long-term investors build positions through gradual accumulation for diversification or wealth protection.

"Instead of trying to time the perfect entry, it is wiser to start with partial allocations and add on meaningful pullbacks of 5–10%. This approach reduces timing risk and emotional stress," said Bharti.

For traders, the strategy needs to be different.

Given the likelihood of sharp two-sided moves, active management and frequent churning may be required.

"Volatility is expected to remain elevated, with potential upside bursts — particularly when Chinese markets reopen, as physical demand from China often adds momentum to rallies," said Bharti.

"For gold, the ₹1,48,000 to ₹1,53,000 range appears to be a reasonable accumulation zone, while ₹2,12,000 to ₹2,30,000 looks attractive for silver to buy on dips. Overall, patience, disciplined allocation, and clarity of purpose — whether investing or trading — are key in navigating this phase," said Bharti.

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stories by Nishant Kumar

Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.Nishant, Principal Correspondent – Markets for Livemint, and has been tracking India’s stock markets and economy for a decade. Prior to Mint, he has w...

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