'If you only invest in gold, life looks great — but here’s the problem…': Expert warns of this trend amid golden run
Dhanteras gold: Gold is glittering brighter than ever — and investors are basking in its shine. On Friday (October 17), gold prices surged past $4,300 per ounce, hitting an all-time high and setting up for their biggest weekly gain in five years. As of 0233 GMT, spot gold was trading at $4,336 per ounce, after touching a session peak of $4,379, while US gold futures for December delivery advanced 1% to $4,349 per ounce.
In India, the rally pushed domestic prices to unprecedented levels — Rs 13,277 per gram for 24-karat gold, Rs 12,170 for 22-karat, and Rs 9,958 for 18-karat, based on 10-gram rates. The yellow metal has now gained about 8% this week, marking its strongest performance since March 2020, when investors fled to safe-haven assets amid the pandemic panic.
But not everyone is cheering. Financial educator Akshat Shrivastava, founder of Wisdom Hatch, issued a cautionary note for those dazzled by the metal’s meteoric rise. “If you only invest in gold, life looks great for you right now — gold has given a crazy run-up,” he said in a recent post. “You might even be chuckling at headlines like ‘My grandmother is beating fund managers.’ But here’s the problem: you’re comparing gold’s best days with equities’ normal days.”
Shrivastava explained that the current euphoria hides a deeper risk — reinvestment risk. “If you’re a 100% gold investor and you decide to sell now, where will you reinvest?” he asked. “That’s the challenge with assets like gold — most gold bugs won’t sell now because they expect more upside. But at some stage, a correction will come. When that happens, if you rerun the numbers, equities versus gold will look very different.”
His advice: diversify. “There’s a reason you invest across asset classes — equities, gold, crypto, real estate — because rotating capital becomes easier. Each asset class performs differently across cycles.”
In another thread on X (formerly Twitter), Shrivastava highlighted the broader macroeconomic implications of the gold frenzy. If gold prices continue to rise, he warned, investors may start liquidating mutual fund SIPs (systematic investment plans) to chase the yellow metal. “Unlike SIPs or direct stocks, people don’t trade gold often,” he said. “When an asset isn’t traded actively, governments earn less in transaction taxes, and even capital gains taxes are delayed — because people don’t book profits.”
In India, selling gold is often seen as a last resort, typically done during a financial emergency. “From a societal standpoint, that means gold sits idle — it doesn’t contribute to productive economic activity,” Shrivastava noted. Meanwhile, if equity SIP inflows stagnate, domestic demand that has so far buoyed Indian markets could weaken significantly.
“If a large section of retail investors start doing gold SIPs instead of equity SIPs, the stock market could lose its biggest support base,” he warned. “For equities to thrive, gold has to cool off.”
What could trigger that? Shrivastava floated two possibilities: “Either the government introduces a punishment tax on gold, or it incentivises equity investments — such as by reducing capital gains tax.”
While the immediate story is India’s love affair with gold, Shrivastava added that the implications are global. “Every government is watching this closely. If the golden rush continues unchecked, they’ll have to step in. Because when everyone’s hoarding gold — the economy stops moving.”
Why is gold rising every day
Since early 2025, gold has recorded 39 new all-time highs, driven by weakening U.S. economic conditions and rising inflation. The Federal Reserve’s rate cuts and hints of further easing have reinforced gold’s appeal as a hedge against fiscal and monetary uncertainty. Mounting federal debt, delayed labour data, and growing fears of recession have added to the bullish momentum. Meanwhile, global central banks continue to diversify away from the US dollar, increasing gold reserves. Many experts have noted that short-term corrections may occur—particularly if geopolitical tensions ease. The long-term outlook for gold remains firmly supported by persistent macroeconomic and structural shifts.