The Rally Drivers
Gold's 19% rupee gain in FY26 was driven by a combination of: (1) Global central bank buying — China, India, and Turkey added significantly to reserves; (2) Dollar weakness as US rate hike expectations faded; (3) Geopolitical risk premium from multiple global conflicts; (4) Rupee depreciation (approximately 3% in the year) which amplifies dollar gold prices in rupee terms.
Historical Patterns
When gold gains over 15% in a single year, the following year has historically been flat to mildly negative in 60% of cases, and strongly positive in 25%. The distribution is wide, which means gold's near-term direction is genuinely uncertain — not a strong timing signal.
Portfolio Perspective
If gold has grown from your intended 10% to 15% allocation due to appreciation, consider trimming back to target. Don't chase the rally by increasing allocation now. If you're under-allocated to gold, a systematic SGB or gold ETF purchase spread over 3–6 months is more sensible than a lump sum at current prices.