Panch Tattva Wisdom

Gold and other precious metals are currently trading at historically elevated levels, making it difficult to define a clear price range either in the near term or the long term. Such phases are not unprecedented. History shows that sharp rallies in precious metals are typically driven by heightened geopolitical tensions, inflation fears, currency debasement, and financial instability.
Consider a few notable episodes. In 1980, amid runaway inflation, geopolitical stress, and a loss of confidence in fiat currencies, gold surged to then-record highs. Once inflation was brought under control through aggressive monetary tightening, gold prices corrected by over 50% in real terms over the following years.
A similar pattern played out after the Global Financial Crisis. Gold peaked in 2011 as fears around sovereign debt, banking stability, and currency dilution dominated global markets. As monetary conditions normalized and systemic fears eased, gold declined by nearly 40% over the next four years.
More recently, during the 2020–2022 period, gold and silver rose sharply on the back of pandemic-driven uncertainty, unprecedented liquidity injections, and supply-chain disruptions. As economies reopened and policy responses evolved, prices entered a phase of consolidation and correction rather than sustaining the earlier momentum.
These historical cycles suggest that when uncertainty recedes—whether through geopolitical calming, monetary discipline, or improved economic visibility—precious metals tend to undergo meaningful drawdowns. Corrections in the range of 30–35% from peak levels have been a recurring feature.
In this context, individuals may consider using any further sharp rise in prices as an opportunity to gradually reduce personal holdings rather than chase momentum. This does not diminish gold’s long-term role as a store of value, but reflects the historical wisdom of disciplined profit-booking during euphoric phases.
Markets move in cycles, and precious metals are no exception. Preserving capital is often as important as growing it.