gold Silver
In the last two days, sharp fluctuations were seen in the prices of gold on MCX. On Monday, gold was at ₹ 1,47,878, which today (Wednesday, 4 February 2026) increased to ₹ 1,57,620. That means an increase of about 6.59%. The surge came after a massive 15.61% decline from the high of ₹1,75,231 made on January 29. In such a situation, the question arises that what should long-term investors do about investing in gold?
Why did gold rise after the fall?
According to Manav Modi, commodity analyst at Motilal Oswal Financial Services, gold made a strong comeback in recent sessions due to the weakening of the dollar. He said that the rise was limited to some extent due to soft dollar/rupee in the domestic market, but after a fall of about 15% in three trading sessions, investors started value buying and short covering, which helped in maintaining the prices.
Amar Rano of Anand Rathi Shares and Stock Brokers says that the rise in gold was due to re-increased demand for safe-haven, buying at cheap prices and expectations of further reduction in interest rates along with geo-political tension.
Will the rise continue in the coming days?
According to Manav Modi, whether this rally will be sustainable will depend on whether the high leverage and speculative trades of the recent decline have been fully exhausted or not, and what is the demand from Asia going forward. Prithviraj Kothari, MD, Riddhisiddhi Bullions and President of IBJA, believes that the US-India trade deal may reduce some of the near-term uncertainty, which may put pressure on safe-haven demand for gold and prices may remain in a range for some time. However, a strong rupee can soften domestic gold prices by reducing import costs.
China factor is also important
According to Modi, the purchase of physical gold is strong in Shenzhen, China, as investors are buying before the Lunar New Year. However, government banks in China have tightened controls on gold investment products to prevent excessive fluctuations.
What do market signals say for gold?
Kothari says that the long-term outlook for gold is still positive. The US Fed’s soft stance, global tensions, financial pressure on major economies and continuous purchases by central banks and ETFs. All these are supporting gold.
What should long-term investors do?
According to Rano, even though there may be ups and downs in the short term, the outlook for gold remains strong in the medium to long term. Kothari also believes that gold will remain in a range for now, but the trend will be positive.