Gold, Silver ETFs Hit Record Highs: What's Driving Prices & Rebalancing Advice

• Gold and silver ETFs surged on January 29, with gold futures on MCX hitting an all-time high of Rs 1,80,779 per 10 grams and silver futures reaching Rs 4,07,456 per kilogram.
• Rising prices are attributed to macro uncertainty, geopolitical tensions (US-Iran), unchanged US Federal Reserve interest rates, and a crypto group's plan to invest in physical gold.
• Gold ETFs like Kotak Gold ETF, Baroda BNP Paribas Gold ETF, Axis Gold ETF, and others saw gains of 9-13%, outperforming silver funds which rose around 8%.
• Motilal Oswal Financial Services notes silver's 200% rally in 12 months vs. gold's 80%, but suggests a shift in risk-reward towards gold due to silver's volatility and compressed gold-silver ratio.
• Investors are advised to rebalance portfolios with a 75% allocation to gold and 25% to silver to manage near-term volatility while retaining long-term exposure to silver.

Why It Matters: Gold and silver ETFs reached record highs due to global uncertainties; investors should rebalance towards gold.