Sitting on 60% returns in my gold portfolio over 4yr. Should I book profits or hold for more upside?

Whenever an asset class exhibits a parabolic price chart like gold has since 2020 it is usually followed by a period of consolidation or a sharp correction. We saw a very similar pattern with the Nifty Midcap 150 index recently in the Indian equity markets. That index jumped nearly 100% in price between 2023 and early 2024 before correcting and taking significant time to attempt new highs.

Historical chart patterns suggest that gold's current trajectory makes it highly susceptible to a similar near-term correction. You also have to look at market saturation because gold is a highly mature asset class with a massive market size of roughly $30 trillion. Because it is so well-established almost everyone who wanted to participate in the current rally has already bought in.

Unlike newer assets like Bitcoin which has a market cap of around $2.5 trillion and room to double its community gold does not have this luxury. It is highly unlikely we will see a sudden massive influx of new retail buyers entering the gold market at these elevated levels.

Instead we are much more likely to see profit-booking from investors who have made substantial returns over the last 3-4yr. Trimming your positions to rebalance your portfolio into reasonably valued equities is a very prudent move right now before the broader market rotates.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.