Gold has had a blockbuster 2025, hitting record highs in rupee terms around ₹13.2 lakh per 100g before easing slightly. Domestic inflows into gold ETFs and funds have surged as a weak rupee, sticky inflation, and global uncertainty drive investors back to the metal. For Indian households, gold is once again more than sentiment — it’s sound strategy.
The 5–15% Rule
Most planners suggest holding 5–15% of your portfolio in gold. Aggressive, equity-heavy investors can stay near 5% for basic protection, while conservative or goal-oriented investors may hold up to 15%. Beyond that, gold offers stability, not strong growth.
Why the Rupee Matters
A weak rupee — near ₹88.8 per dollar in October — makes imported gold costlier, boosting local prices even when global rates are flat. This currency hedge helps gold offset equity or currency shocks.
Sovereign Gold Bonds (SGBs)
No new SGB tranches have been announced for FY2025–26, though existing ones remain valid. Holders earn 2.5% annual interest and enjoy tax-free gains on redemption after 8 years. For new investors, gold ETFs and mutual funds are now the best routes to financial gold.
ETFs, Funds, or Physical Gold?
Gold ETFs offer liquidity and low costs via Demat accounts, while mutual funds suit those without one. Physical gold is less efficient due to GST and storage issues. Combining ETFs and SGBs provides both liquidity and tax benefits.
Tax & Timing
Gold ETFs and funds attract a 12.5% long-term capital gains tax after one year. SGBs enjoy tax-free redemption, but their interest is taxable. Stagger your investments through SIPs and rebalance annually to maintain your 5–15% allocation.
Bottom Line
Gold remains a trusted hedge in uncertain times. With or without new SGBs, investors have multiple efficient ways to own it. The key: don’t chase rallies — let gold quietly protect your wealth when markets shake.
