Gold Prices Soar 9.6%, But Investors Warned to Prepare for Volatility

Gold prices have surged 9.6% in a month, but investors should prepare for volatility rather than chase the price. Expectations of lower real rates, US fiscal concerns, and central-bank buying are supporting demand for gold.

A hawkish Federal Reserve, higher real yields, and a stronger dollar could trigger a correction in gold prices. However, further monetary easing, a weaker dollar, and persistent fiscal uncertainty may extend the rally in coming months.

Investors should view gold as a portfolio hedge and wealth protector rather than a vehicle for maximising returns. Gold allocation should not exceed 10-15% of the portfolio, and investors whose allocation has risen after the rally should rebalance.