Gold Crosses ₹1 Lakh: What It Means for Investors & How to Invest

“Gold is a way of going long on fear.” — Warren Buffett

Gold recently crossed ₹1 lakh per 10 grams—a historic milestone that's made headlines across financial media. This surge reaffirms gold's reputation as a safe-haven asset during times of economic uncertainty, inflation, and market volatility.

But with prices at all-time highs, is it still the right time to invest? And if yes, what's the best way to gain exposure to gold in today's market?

Why Gold Still Shines: Historical Performance & Outlook

Despite periodic dips, gold has demonstrated consistent long-term growth. More importantly, it acts as a hedge against inflation, geopolitical risk, and currency fluctuations—making it a vital part of a diversified portfolio.

Gold Returns (past 9 Years)

Key Insights:

• CAGR (2010-2025): ~17.01%
• Outperforms during inflationary and crisis periods
• Low correlation with equity markets = effective risk hedge

5 Ways to Invest in Gold in India

Gold is no longer just about buying jewellery. Investors now have multiple options, each suited to different financial goals and risk appetites.

1. Physical Gold (Jewellery, Coins, Bars)

Pros:

• Tangible, emotional & cultural value
• Easy to pledge or liquidate during emergencies

Cons:

• 3% GST + making charges (~10%)
• Purity & storage risks

2. Gold ETFs (Exchange-Traded Funds)

These are mutual fund units that track the real-time price of gold and trade like stocks.

Pros:

• High liquidity & purity (backed by 99.5% gold)
• No making charges, regulated by SEBI

Cons:

• Demat account required
• Expense ratio applies

💡 Investor Note: Gold ETFs also benefit from INR depreciation when international gold prices rise.

3. Sovereign Gold Bonds (SGBs)

Issued by the RBI on behalf of the Government of India, these are ideal for long-term investors.

Pros:

• 2.5% annual interest (paid semi-annually)
• No capital gains tax if held till maturity (8 years)
• Backed by the Government—highest credibility

Cons:

• Lock-in of 5-8 years
• Limited liquidity in the secondary market
• Interest is taxable

4. Digital Gold

Buy or sell gold online via apps in real-time—even for as low as ₹1.

Pros:

• Convenient, secure vault storage
• Ideal for micro-saving and gifting

Cons:

• Not SEBI or RBI regulated
• 3% GST + platform charges (2-6%)

5. Gold Mutual Funds

These funds invest in gold ETFs or related securities and are accessible without a demat account.

Pros:

• SIP options available
• Expertly managed

Cons:

• Higher fees than ETFs
• Indirect exposure

How to Choose the Right Option

Here's a quick comparison based on purpose, horizon, taxation, and convenience:

Final Thoughts

While gold has already delivered impressive returns, its strategic role in a portfolio is far from over. Whether you're preserving capital, diversifying, or planning for long-term stability, gold still has a place—especially in a climate of global uncertainty and high inflation.

Smart Strategy: Combine SGBs for long-term tax-free gains, ETFs or mutual funds for liquidity and market access, and minimal physical gold for cultural needs or pledging purposes.

Disclaimer: This article is for educational purposes only and does not constitute financial advice. Readers are advised to conduct independent research or consult a licensed financial advisor before making any investment decisions. Investments in the securities market are subject to market risks. Please review all relevant documents carefully prior to investing. Past performance is not indicative of future results.