Last Updated on April 21, 2026 by Hemant Beniwal
“Gold is the money of kings, silver is the money of gentlemen, barter is the money of peasants – but debt is the money of slaves.” – Norm Franz
In early 2024, gold crossed Rs 70,000 per 10 grams for the first time. By early 2025 it had crossed Rs 80,000. By the time this post was updated in April 2026, gold was trading above Rs 90,000 per 10 grams.
Every time gold makes a significant run, I start getting calls from clients asking the same question: “Should I buy more gold now?”
And every time, my answer is the same: “That depends on why you want to hold gold – and more importantly, whether you understand what gold actually is in a portfolio.”
Gold in India occupies an unusual space. It is emotional, cultural, and financial simultaneously. Separating these three aspects is the starting point for any rational decision about it.
⚡ Quick Answer
Gold serves one primary role in a retirement portfolio: diversification and crisis hedge. It tends to preserve value when equities fall sharply, currencies weaken, or geopolitical stress is high. It is not primarily a return-generating asset – over long periods, gold’s real returns (after inflation) are modest. The right allocation for most retirement portfolios is 5-10% of the total portfolio in gold, held as Sovereign Gold Bonds or Gold ETFs rather than physical jewellery. Do not buy gold because prices have risen recently – that is speculation, not planning.
What Gold Is and What It Is Not
Gold is a store of value and a crisis hedge. It is not a growth asset.
Over very long periods – decades – gold has roughly maintained its purchasing power in real terms. An ounce of gold bought a fine toga in ancient Rome; an ounce of gold buys a fine suit today. This purchasing power preservation over centuries is gold’s genuine superpower.
But over investment-relevant periods of 10-20 years, gold’s inflation-adjusted return is modest and variable. Between 2012 and 2018, gold delivered negative real returns in India for much of that period – a six-year stretch where simply staying in a fixed deposit would have outperformed. Between 2019 and 2024, gold delivered exceptional returns driven by Covid uncertainty, global inflation, and geopolitical stress.
The unpredictability of gold’s short and medium-term returns makes it unsuitable as a primary wealth-building vehicle for retirement. A retirement corpus needs consistent, compounding growth over 20-25 years. Gold cannot reliably deliver that.
What gold can reliably deliver is low correlation with equities. When stock markets fall sharply – as they did in 2008, 2020, and during acute geopolitical events – gold tends to hold value or rise. This counter-cyclical behavior is its genuine portfolio value.
Physical Gold vs Paper Gold: The Practical Choice
Most Indians hold gold as jewellery. This is not an investment. It is consumption. The making charges (10-25% of jewellery value), wear and tear, purity uncertainty, and storage cost make jewellery unsuitable as a financial asset. You will not sell your wife’s wedding jewellery when gold prices are attractive. Therefore, jewellery should not be counted in your investment portfolio.
For investment purposes, paper gold options are far superior:
Sovereign Gold Bonds (SGBs). Issued by RBI on behalf of the Government of India. The bond pays 2.5% annual interest (taxable) on the face value, which no other gold investment does. At maturity (8 years), redemption is entirely tax-free. This combination of gold price participation plus 2.5% interest plus tax-free maturity makes SGBs the most efficient way to hold gold for long-term investors. The RBI has reduced new SGB issuances since 2024, so secondary market purchases on exchanges are the available route for new investors.
Gold ETFs. Gold ETFs track physical gold prices with high purity (99.5%). They can be bought and sold like shares on NSE/BSE. They carry an expense ratio (typically 0.5-1%) and are subject to LTCG tax (after 24 months of holding). More liquid than SGBs but less tax-efficient for long-term investors.
Gold mutual funds. Fund of funds that invest in Gold ETFs. Useful for investors who want to do SIP into gold but do not have a demat account. Slightly higher expense than direct ETF purchase but offer SIP convenience.
“I have seen clients buy gold at Rs 55,000 because prices were rising, then panic when it corrected to Rs 45,000. Gold bought for the wrong reason – recent price momentum – produces exactly the wrong investor behaviour. The patient, systematic allocation works. The reactive purchase never does.”
– Hemant Beniwal, CFP, CTEP | Founder, RetireWise
How Much Gold Belongs in a Retirement Portfolio
There is no universal answer, but a general framework works for most Indian retirement investors: 5-10% of the total investment portfolio in gold. This allocation provides meaningful diversification benefit without over-allocating to a non-yielding asset.
Below 5%: the diversification benefit is real but small. The allocation is too minor to matter in a market crisis.
At 5-10%: the allocation provides meaningful protection during equity bear markets and currency depreciation, while not significantly dragging long-term portfolio returns.
Above 15-20%: the allocation becomes a meaningful drag on long-term returns because gold does not compound the way equity does. A portfolio that is 30% gold is sacrificing decades of compounding for defensive comfort that could be achieved at lower cost.
The allocation should also account for existing physical gold held (jewellery inheritance, accumulated purchases). Many Indian families already have implicit gold exposure far in excess of 10% of net worth through inherited jewellery. For these families, additional paper gold investment may be unnecessary.
Does your retirement portfolio have the right gold allocation?
A RetireWise retirement plan determines the appropriate gold allocation for your specific portfolio, accounting for existing physical holdings and your overall asset mix.
The Indian Context: Why Gold Feels Different Here
In India, gold is not just a financial asset. It is cultural currency – associated with prosperity, auspicious occasions, family wealth transfer, and social signalling. This cultural layer means decisions about gold are rarely purely financial.
A useful distinction: gold as cultural obligation vs gold as investment. Buying gold for a daughter’s wedding, as part of family tradition, is a cultural obligation – budget for it separately from your investment portfolio. Buying gold as a systematic, disciplined allocation to hedge your equity portfolio is an investment decision – apply financial logic to it.
Mixing the two creates confusion. The cultural gold purchase gets justified with investment rationale. The investment allocation gets influenced by cultural enthusiasm. Keeping them separate produces better decisions in both domains.
Read – ETF and Index Funds India: The 2026 Guide for Retirement Investors
Read – Long Term vs Short Term Investments: The Only Framework You Need
Frequently Asked Questions
With gold above Rs 90,000 per 10 grams, is it too late to buy?
If you are buying gold to reach a target allocation (say, from 2% to 8% of your portfolio), the current price is less relevant – you are buying for portfolio construction, not for price prediction. If you are buying gold because prices have risen sharply and you fear missing out, that is speculation rather than allocation. The rational approach: determine your target gold allocation, compare it to your current holding, and make up the difference systematically over 6-12 months rather than all at once. This reduces the risk of buying at an immediate peak while still building the desired allocation.
Are Sovereign Gold Bonds better than Gold ETFs?
For most long-term investors, yes. SGBs offer 2.5% annual interest (Gold ETFs offer zero yield), and redemption at maturity is completely tax-free. Gold ETFs are more liquid (can be sold any day on exchange), while SGBs have an 8-year term with early exit only on exchange at market prices. For investors with a long horizon who want tax efficiency, SGBs win. For investors who may need liquidity within 8 years or who want to rebalance frequently, Gold ETFs provide more flexibility. Since RBI reduced new SGB issuances from 2024 onwards, existing SGBs trade on exchanges at a small premium or discount to NAV.
Should I count inherited jewellery as part of my gold allocation?
Yes, but with a caveat. Jewellery you will not sell under normal circumstances – wedding sets, family heirlooms – should be counted but discounted. A practical approach: include 50-60% of the market value of jewellery you consider illiquid in your gold allocation calculation. Jewellery you would realistically consider selling or that is simply accumulated purchases (chains, coins) can be counted at full market value. This prevents double-counting in your allocation while acknowledging the real economic value of physical gold holdings.
Gold in a retirement portfolio is like a seatbelt in a car. You do not wear it because you plan to crash. You wear it because you cannot predict when or whether you will crash. The value becomes apparent only when you need it. The investor who builds a systematic gold allocation and forgets about it during bull markets is the one who benefits when markets fall.
Buy gold for the right reasons. Then hold it patiently.
Want a retirement portfolio with a thoughtfully constructed asset allocation?
RetireWise builds retirement plans where every asset – equity, debt, and gold – has a defined role and appropriate weight for your specific timeline and goals.
💬 Your Turn
What percentage of your investment portfolio is currently in gold (including jewellery)? Do you think about gold as cultural obligation or as a financial asset? Share in the comments.