Gold: Overbought but Still a Strategic Hedge

Ratin Biswass / 16 Oct 2025/ Categories: DSIJ_Magazine_Web, DSIJMagazine_App, Letters to Editor, MF - Letter to Editor, Mutual Fund

Could you provide your view on gold as a commodity?

Could you provide your view on gold as a commodity? Should investors consider selling on every logical rise, given that it appears overbought? - Vishal Khanna [EasyDNNnews:PaidContentStart]

Editor Responds : Gold has been showing signs of strong momentum and many technical indicators suggest it may be in an overbought zone. Historically, when gold reaches such technical levels, short-term corrections or profit-booking opportunities tend to emerge. However, it is important to differentiate between tactical trades and a strategic view. Selling on every logical rise can help capture short-term gains, especially for traders looking to capitalize on volatility. For long-term investors, gold continues to serve as a hedge against inflation, currency fluctuations, and geopolitical risks, so a complete exit may not be advisable. A balanced approach, combining selective profit booking with a core long-term allocation, could be the most prudent strategy in the current environment.

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