Mumbai: Even though gold prices hover close to ₹1 lakh per 10g, market experts still advise adding the yellow metal to their portfolios in an uncertain global environment through exchange-traded or multi-asset funds.
On 13 June, the price of 99.9% pure gold spiked 1.6% to ₹99,058 per 10g, according to the India Bullion and Jewellers Association (IBJA), after fluctuating between ₹95,000 and ₹97,000 for nearly a month.
That came as Israel launched ‘Operation Rising Lion’ against Iran, calling it a targeted military mission to eliminate threats to its national security. Israel’s Prime Minister Benjamin Netanyahu said the operation would continue until the Iranian threat is removed. A prolonged conflict will not only drive up oil prices but also slow down global trade, hurting risky assets like stocks.
Also read | Gold investment demand surges 170% in March 2025 quarter, driven by ETF inflows
It’s better to invest gradually, especially through gold exchange-traded funds (ETFs), which are easily available to retail investors, said Naveen Mathur, director of commodities, currencies, and international business at Anand Rathi Share and Stock Brokers.
Passive investment
A Gold ETF is a passive investment that tracks the price of physical gold by investing in bullion. One unit is backed by 1g of physical gold of very high purity. Such funds had ₹58,885 crore worth of net assets under management as of March, surging 88% over a year earlier, according to data from the Association of Mutual Funds in India (AMFI).
“A systematic investment plan (SIP), similar to how people invest in mutual funds, is a good approach—investing a fixed amount regularly,” Mathur said. Ideally, gold should make up around 10% of a person’s portfolio to help balance risk, he said.
Mathur said that the dollar index hovering around 98–99 reflects weakness. “Gold usually goes up when the dollar falls. On top of that, the rupee is also weakening, which pushes gold prices even higher in India,” he said. “All these factors are keeping the gold market bullish.”
Others also expect the dollar to decline further.
Investors could have some exposure to gold in their portfolios through ETFs or multi-asset funds in the near term, said Devang Shah, head of fixed income at Axis Mutual Fund.
Further upside likely
Due to global uncertainty and the possibility of the dollar falling further, gold prices could see further upside even though they’ve already gone up a lot in the past year or so, he said. Gold is becoming more popular as a safe investment, especially if the US dollar gets weaker, Shah said.
Last year, many people believed that the US economy would stay strong and lead the world, especially after President Donald Trump got elected, but that belief has started to weaken, according to Shah.
“Trade tensions have eased, and the US is now negotiating more with other countries. At the same time, people are getting worried about the slowing US economy and its rising debt,” said Shah.
For over a year now, gold prices have been rising amid global uncertainty. The previous metal has spiked 38.3% on the MCX in the past year.
Gold became more attractive after Trump started the tariff war, which led to more uncertainty, according to Rajesh Rokde, chairman of the All India Gem and Jewellery Council. He also pointed to “de-dollarization”, where central banks around the world are reducing their dollar reserves and turning to gold instead.
“The US Federal Reserve has also been cutting interest rates, which means returns from banks are lower,” Rokde said. “That makes gold a better option for people looking to grow or protect their money.”
