Gold has long been considered a symbol of wealth, security, and stability, but it’s more than just a shiny metal. It’s a powerful asset that plays a crucial role in investment portfolios, especially in uncertain economic times. Recently, we’ve seen a significant rise in the allocation of gold within Indian portfolios, with investments in gold reaching a staggering 15%—a huge leap from previous years. So, why is gold getting so much love? And more importantly, is it time for you to get in on the action too?
Gold Continues to Dominate Indian Portfolios
Gold continues to reign supreme in Indian portfolios, with allocations rising to 15% in 2025. Whether you’re looking for a hedge against inflation, a safe place to park your money, or just want to diversify your portfolio, gold can offer stability in these uncertain times. From Gold ETFs to Sovereign Gold Bonds, there are plenty of ways to get started with investing in gold—each with its own set of benefits. Just remember to do your research, consider your financial goals, and consult with an expert to figure out how much gold is the right fit for your portfolio.
Why is Gold So Popular in India Right Now?
Global Economic Uncertainty and Inflation Fears
If you’ve been keeping an eye on the markets, you’ve likely noticed how unpredictable things have become. With geopolitical tensions heating up, especially with conflicts like the Israel-Iran situation, investors are turning to safe-haven assets like gold. Gold has a unique ability to hold its value, even during times of crisis. As of 2025, gold prices in India have surpassed ₹1,03,000 per 10 grams, reflecting this surge in demand.
Why is this important for you? Well, if you’re concerned about inflation and the weakening value of paper currencies, gold is a way to preserve wealth over the long term. Historically, it has been a reliable store of value when inflation rises or when the value of the rupee drops.
How Do You Know If Gold is a Good Investment for You?
Benefits of Gold in Your Portfolio
Gold is often considered a “safe bet” because it tends to hold its value during financial crises. Even during the Great Recession of 2008 or the COVID-19 market crash, gold prices remained resilient. If you want to add some stability to your portfolio and are looking for a way to balance out riskier investments like stocks, gold is a great option.
Here are a few reasons why adding gold to your portfolio might be a smart move:
- Protection Against Inflation: With inflation on the rise globally, having gold in your portfolio helps protect your purchasing power.
- Global Demand: Central banks are buying tons of gold. In fact, over 244 metric tons of gold were purchased by central banks in the first quarter of 2025. When central banks are getting into gold, it’s a sign that there’s something solid about it.
- Geopolitical Tensions: When political tensions increase (like they have recently), gold acts as a shield to protect your wealth. In 2025, gold prices have skyrocketed, showing that investors flock to it during uncertain times.
Types of Gold Investments in India
Gold can be a tricky investment to navigate if you don’t know your options. There are several ways to invest in gold, each with its own benefits and risks. Let’s break down the most popular methods.
1. Gold ETFs (Exchange-Traded Funds)
Gold ETFs are one of the most straightforward ways to invest in gold. They offer liquidity, which means you can buy and sell them easily on the stock exchange. The best part? You don’t have to worry about storing physical gold or paying hefty making charges as you do with jewelry.
2. Sovereign Gold Bonds (SGBs)
SGBs are issued by the Indian government and provide a fixed interest rate of 2.5% annually. They’re an excellent way to invest in gold without the hassle of handling the metal itself. Plus, the government backs them, so they carry a low risk. If you’re in it for the long haul, SGBs are a solid option.
3. Digital Gold
Digital gold is exactly what it sounds like: gold purchased and stored digitally through various platforms like Paytm or PhonePe. You can buy as little as ₹1 worth of gold, making it super accessible for small investors. Digital gold combines the flexibility of online platforms with the security of gold, which makes it a great choice for beginners.
4. Physical Gold (Jewelry, Coins, Bars)
While this is the most traditional form of gold investment, it comes with its own set of challenges. Storage and purity verification can be a hassle, not to mention the high making charges for jewelry. If you’re looking for something that’s easily liquidated, physical gold might not be your best option.
How Much Gold Should You Own?
Now that you know the different ways to invest in gold, you might be wondering: How much gold should I include in my portfolio? The short answer is that it depends on your risk tolerance and investment goals.
In India, the average gold allocation in portfolios has increased to around 15% in 2025. This is up from around 8% in previous years, signaling a growing trust in gold’s stability. Financial advisors often recommend that you keep 10–15% of your portfolio in gold for better risk management.
FAQs
1. Is It a Good Time to Buy Gold Right Now?
Yes and no. Gold has been trending upward, but if you’re buying at the current high prices, your short-term returns might be limited. However, if you’re investing with a long-term perspective (5-10 years), gold is likely to maintain its value.
2. What Are the Risks of Investing in Gold?
Gold is a relatively safe investment, but it’s not entirely risk-free. The biggest risk is price volatility. Gold prices can swing widely in the short term due to market factors. Additionally, storage costs and making charges can eat into your profits if you’re buying physical gold.
3. Should I Invest in Gold ETFs or Physical Gold?
Gold ETFs are generally a better option for most investors due to their liquidity and low maintenance. However, if you prefer owning physical assets, gold coins or bars might be more appealing. Keep in mind, though, that physical gold requires more effort to store securely.
4. How Can I Invest in Gold if I Don’t Have Much Money?
Digital gold is an excellent option for small investors. You can start with as little as ₹1, making it very accessible for everyone, regardless of budget.
