The commodity market is navigating a phase marked by major global triggers. While US-Iran tensions, updates around the Strait of Hormuz, and fluctuating crude oil prices remain key concerns for investors, recent corrections in gold and silver have raised questions about whether further sharp declines lie ahead or if this presents a buying opportunity.
According to commodity expert Adib Noorani, there is no need for panic. Whether dealing with crude oil, precious metals, or overall portfolio management, investors should avoid impulsive decisions and adopt a disciplined, phased approach.
Crude Oil Driven by Geopolitics
Noorani highlights that crude oil prices are currently influenced more by geopolitical events than by traditional demand-supply dynamics. Developments surrounding the Strait of Hormuz directly impact market sentiment.
If Middle East tensions do not escalate further, crude is unlikely to cross the $90 per barrel mark in the near term, with a range of $85 to $87 appearing more probable. However, in the event of major war-led supply chain disruptions, prices could rapidly rise to $90–$100, and potentially reach $105 per barrel under severe conditions.
Since crude oil directly affects transportation, manufacturing, and operational costs across industries, sharp price hikes can push up daily consumer expenses. However, the expert notes that current conditions do not suggest any immediate cause for concern for general consumers.
Strong Support for Gold and Silver
Despite recent corrections in gold and silver, Noorani does not view this as the start of a major crash.
- Key Support Levels: Gold has very strong support zones at ₹1.20 lakh, ₹1.10 lakh, and ₹1 lakh per 10 grams. As long as these levels hold, a deep fall remains unlikely.
- Historical Context: Historically, gold typically witnesses normal corrections of 20% to 35% after sharp rallies. Extreme drops of 50% to 70% are exceptionally rare.
The Strategy: Buy on Dip, Sell on Rise
The expert strongly advises investors to follow a ‘Buy on Dip, Sell on Rise’ strategy rather than selling their entire holdings at once.
If an investor holds 10% gold in their portfolio, they should book partial profits gradually while retaining the core holding, as predicting the exact start of the next rally is impossible.
Note on Cash Holdings: The capital released after selling on a rise should ideally be kept in cash. Since market bottoms are hard to predict, locking funds into other illiquid investments may prevent investors from capitalizing on the next dip.
US Fed Policy and Dollar Index Signals
The upcoming US Federal Reserve meeting remains a primary trigger for the market. A hawkish stance with delayed rate cuts could keep pressure on gold and bullion.
Additionally, the US Dollar Index at the 100–101 level is critical. A strengthening US Dollar could lead to further weakness in precious metals.
Guidance for Traders and Long-Term Investors
Rather than attempting to time the exact top or bottom of the market, market participants should follow a staggered entry plan:
- Aggressive Traders: Look to buy on a 3% dip in gold and a 5% dip in silver.
- Conservative Investors: Wait for a 5% correction in gold and an 8% correction in silver.
Portfolio Allocation Formula
Noorani recommends keeping a 15% to 20% allocation to bullion within a broader portfolio—comprising 12% to 15% in gold and 5% to 8% in silver. Gold suits risk-averse investors, whereas silver offers higher return potential for those comfortable with volatility.
For a well-balanced overall portfolio, Noorani suggests:
| Asset Class | Recommended Weightage |
| Equities | 50% – 60% |
| Gold & Bullion | 20% – 30% |
| High-Risk Assets (e.g., Bitcoin) | ~10% |
Proper diversification does not mean holding 100 different stocks; a balanced portfolio with 8 to 10 solid instruments is sufficient for long-term growth.
Input: Good Returns
