'Gold isn't an afterthought': Why experts say it’s time to treat the yellow metal as a core asset

In the glittering world of financial assets, few stories have quietly outperformed gold’s rise in recent years. Since July 2021, gold prices have more than doubled on the Multi Commodity Exchange (MCX), climbing from ₹47,434 to nearly ₹97,000 per 10 grams by July 2025. That’s a 100% return, no small feat in a period dominated by volatile equities and surging debt. And yet, this golden performance has passed many portfolios by, unnoticed and underutilised.

Forgotten friend

“Most portfolios weren’t structured to benefit from this rally,” said Aksha Kamboj, vice president of the India Bullion and Jewellers Association (Ibja). “Gold is still treated more like a tradition or insurance policy, rather than an asset with a job to do.”

The trouble, she said, lies in perception. Indians are the world’s most ardent gold consumers, yet the metal remains trapped in lockers and bangles—visible at weddings, but invisible in portfolios.

“We’re trying to shift that mindset,” Kamboj added. “Gold must move from passive to purposeful. Otherwise, no matter how much it rallies, portfolios won't reflect that upside.”

Asset or ornament?

There’s a stark difference between holding gold and using gold. “Jewellery has emotional value, yes,” said Prithviraj Kothari, managing director of RiddiSiddhi Bullions Limited (RSBL). “But it doesn’t serve an investment purpose. It doesn’t yield. It can’t be liquidated easily. Worst of all, it distorts your perception of how much gold you hold as an asset.”

The rise of Sovereign Gold Bonds (SGBs), digital gold, and Exchange-Traded Funds (ETFs) offers investors new avenues to make gold work for them. These formats come with returns, tax benefits, and liquidity—things jewellery can’t offer.

“Investors often lack conviction,” said Piyush Gupta, Director at PP Jewellers by Pawan Gupta. “They own gold, but they don’t view it as a financial tool. Without that belief, the format doesn’t matter. It’s like buying stocks and never checking your portfolio.”

What investors need, Gupta said, is a mindset shift. “Gold isn’t just a shiny comfort blanket. It’s a financial engine if you let it be one.”

How much is enough?

So, how much gold should you own in today's world, one wracked by war, debt, and financial market fragility?

“Earlier, 5-10% was the norm,” said Samit Guha, interim CEO & chief financial and technology officer at precious metals processing facility MMTC-PAMP. “But given today's global instability, a 10-15% allocation is more sensible.”

That increase isn't just speculation. Central banks have been on a buying spree since 2022. Even the Reserve Bank of India (RBI) has added to its reserves. “That’s no accident,” said Guha. “When central banks seek shelter, it tells you something.”

Kamboj agreed: “We’re in a different macroeconomic world now, rising global debt, fragile currencies, inflation volatility. In this reality, a strategic gold allocation makes more sense than ever, especially for Indians overweight on equity and real estate.”

“Typically, advisers recommended an allocation of 5-10% to gold. However, due to heightened geopolitical risk, inflationary pressures, and increased central bank gold purchases, many now deem that an allocation of 10-15% is more prudent and sensible,” said RSBL’s Kothari.

Purpose, not panic

Gold isn't a fire alarm you ring when stocks tank. It’s a stabiliser—a steady counterweight to market chaos. But to use it that way, you need to treat it like any other asset.

“Review your gold allocation once or twice a year,” said Guha. “The idea isn’t just to hold gold, but to hold the right amount at the right time.”

Kamboj called this conviction-based rebalancing, the act of sticking to your plan regardless of short-term trends. “Don’t just sell after a rally. Sometimes, you need to top up gold when equities surge and your portfolio drifts out of balance.”

Gupta said even passive neglect can be dangerous. “Letting gold sit quietly at 5% might mean you miss gains. But if it creeps up to 20% and you don’t rebalance, you might be overexposed. Either way, you lose control.”

The point isn’t to chase gold’s highs but to keep it working within your strategy. “Gold should be treated like a core holding,” Gupta added. “Not an afterthought.”

Return of relevance

A decade ago, gold was mostly treated as insurance. Now, it’s shifting towards strategic status. “During the 2008 financial crisis, the 2020 pandemic, and even the 2022 Ukraine war, gold held its own,” said Guha. “It’s earned its place in a modern portfolio.”

And yet, its full potential still goes untapped. For all its historical loyalty, gold is often sidelined during good times and only remembered in panic.

Kamboj believes that it needs to change. “Gold isn’t just for bad times. It’s for long-term value. It’s your portfolio’s quiet, reliable anchor.”

The shift is slowly happening. Younger investors are leaning into digital gold and ETFs. Advisors are recommending higher allocations. But conviction still lags.

“Too many investors still see gold as a tradition and not a strategy,” said Kothari. “That’s the mindset we need to break.”

FOMO factor?

Could gold be the next asset people rush into too late? "If prices continue to rise at this pace, gold could well turn into a classic FOMO asset. Everyone will want in, just when it’s already expensive,” said Guha.

And that’s the irony. The best time to build a gold position was five years ago. The second-best time might be today if done with intention, not emotion.

Gold’s job isn’t to be glamorous. It’s to be grounded, resilient, and quietly compounding. Your portfolio doesn’t need a golden chandelier. It needs a golden foundation.