5-10% of your portfolio is the range most planners use for gold, held purely as a diversifier - not a return driver. The bigger question in 2026 isn't "how much" but "in what form," because the one instrument most people were told to buy, Sovereign Gold Bonds, stopped taking new investors in February 2024.
Gold isn't in a portfolio to make you rich. Over long periods equity assumptions (historically around 11-12%) have beaten gold, and gold pays no dividend or interest of its own. It earns its place because it tends to hold up, or even rise, in years when equity and the rupee wobble - a global slowdown, a currency slide, a geopolitical shock. That low correlation is the whole case for it. Past 10-15% of a portfolio, you're no longer diversifying, you're making a directional bet on gold prices.
| Form | Liquidity | Ongoing cost | Notes |
|---|---|---|---|
| Physical (jewellery/coins) | Low - resale at a discount | Making charges 8-25%, storage risk | Cultural value only; weak as an investment |
| Gold ETF | High - trades on exchange | Low (~0.4-0.8% expense ratio) | Needs a demat + trading account |
| Gold mutual fund (fund-of-fund) | High - redeem anytime | Slightly higher than the ETF it holds | No demat needed; SIP possible, fits a goal plan |
Digital gold apps exist too, but most aren't SEBI-regulated and carry a spread plus a storage fee after an initial free period - fine for a token amount, not for serious allocation.
Sovereign Gold Bonds were the best "paper gold" for years - interest on top of the gold price, and capital gains tax-free if held to the 8-year maturity. The government hasn't opened a new tranche since February 2024, with no confirmed date for another. If you already hold SGBs, there's usually no reason to sell early - hold to maturity and keep collecting the ~2.5%/year interest. For anyone starting fresh, that product simply isn't on offer, so the real choice today is between a gold ETF and a gold mutual fund.
Tax on gains outside SGBs follows the general capital-gains rules for such funds under current law - confirm the year's holding-period and rate rules, or check with a CA, before planning around a specific number.
In a full goal plan - a wedding or retirement goal 10-15 years out, say - gold typically sits in the "stable" sleeve alongside debt, its share fixed as a percentage rather than chased up or down with the price, and rebalanced as the goal nears.
Q. Is gold a good investment for 2026?
A. Gold isn't meant to be judged year to year - it's a portfolio stabiliser, not a growth asset. Judge it on whether it reduces the swings in your overall portfolio, not its standalone return in any one year.
Q. Can I still buy Sovereign Gold Bonds?
A. Not as a fresh purchase from the government - no new tranche has opened since February 2024. You can buy existing SGBs on the stock exchange from other holders, but at a market price that may differ from the gold price.
Q. Should I convert my old gold jewellery into ETFs?
A. Not necessarily - jewellery you'll wear or gift carries value beyond returns. But coins or bars held purely as investment are usually better homes in ETFs or gold funds going forward, given making charges and poor resale liquidity.
Q. How much gold is too much?
A. Past roughly 15% of your total portfolio, you've moved from diversification to a concentrated bet on gold prices - worth asking if that's deliberate, or something that crept up as gold rallied while you didn't rebalance.
Plan Our Future · AMFI-registered Mutual Fund Distributor (ARN-360754). Mutual Fund investments are subject to market risks, read all scheme related documents carefully.