**MARKET BRIEF: ASSET ALLOCATION UPDATE FEBRUARY 2026** Gold and US equities have emerged from a transformative 2025 with strong momentum, though recent weeks have introduced tactical volatility. As of mid-February 2026, the investment landscape is defined by record-breaking gold prices and a tech-driven US equity market facing fresh structural questions. **Gold Performance and Outlook** Gold has delivered exceptional returns, surging approximately **65%** during 2025. In the first six weeks of 2026, the metal scaled **12 all-time highs**, briefly breaching the **$5,400 per ounce** mark in late January. Despite a subsequent correction toward the **$4,900 – $5,000** range in mid-February, the structural bull case remains intact. In the Indian market, the price per 10 grams hit a record **INR 175,231** in January before easing by roughly **7%** in February. Institutional forecasts remain bullish, with year-end 2026 targets ranging from **$5,055** to **$5,600 per ounce**. Demand is currently driven by central bank accumulation, which is expected to reach up to **800 tonnes** this year, and strong inflows into gold ETFs. **US Equity Markets and Tech Volatility** US markets started February with resilience but have recently entered a "paused" phase. The S&P 500 is hovering near **6,850 points**, while the Nasdaq Composite sits around **22,600**. While January payroll data showed a robust addition of **130,000 jobs** and unemployment fell to **4.3%**, markets are grappling with "AI disruption fears." Heavyweight tech stocks, including Alphabet and Nvidia, have seen localized pullbacks as investors reassess valuations. Despite this, corporate fundamentals remain solid with **76%** of S&P 500 companies beating earnings estimates in the latest quarter. **Strategic Implications for Indian Investors** The case for US equities remains anchored in a potential currency kicker. The US dollar is estimated to be roughly **15% overvalued** on a fair-value basis, suggesting that any further rupee depreciation could boost the effective returns for Indian holders of US assets. A strategic allocation of **20–30%** to US equities is recommended to capture global innovation and hedge domestic currency risk. Conversely, a measured gold allocation of **10–15%** continues to serve as an essential "shock absorber." This balance protects portfolios against geopolitical flare-ups—such as recent US-Iran tensions—while maintaining exposure to the compounding power of the US tech and manufacturing sectors. Current market levels suggest that while gold offers a resilient floor, US equities provide the necessary growth engine for long-term wealth creation. Investors should prioritize systematic entries during the current February pullbacks to build efficient, diversified positions for the remainder of 2026.