Gold in your portfolio

Gold at Rs 1.55 lakh per 10 grams (September 2026) has made a quiet mess of Indian portfolios. Anyone who held a sensible 10% allocation three years ago is now sitting on 15-18% without making a single decision, and anyone who held none is wondering if they missed the only trade that mattered. Both groups are asking the same question, and it is the right one: not “will gold go up” but “how much of my money should be in it”. That question has a boring answer, and boring is the point.

The baseline: 5-10%

The 10% figure is not derived from a formula. It reflects what gold actually does: it pays no interest, builds nothing, and earns its keep exactly when everything else is on fire. Wars, currency crises, banking panics, inflation scares: the price of gold is a long-running poll of how scared the world is. You hold it for the same reason you buy insurance, and you would not put 40% of your salary into insurance premiums.

Below 5%, the hedge is too small to matter in a crisis. Above 15%, you have stopped insuring your portfolio and started betting on fear. Somewhere in the 5-10% band, gold does its job without eating the returns of the assets that actually compound.

The part Indian families get backwards

Most households do not have a gold allocation; they have gold accumulation. Jewellery bought for weddings, coins from grandparents, chains sitting in a locker. Count it honestly and many families discover 20-30% of their wealth is in metal that earns nothing and costs locker rent, with making charges of 10-15% destroyed the day it was bought. Jewellery is consumption with sentimental value. It is not an investment, and including it in your “allocation” is how the allocation never gets made deliberately.

The form matters more than the metal

For the deliberate 5-10%, the sensible forms in 2026 are gold ETFs and gold mutual funds: priced at the metal, held in demat, sold in a day. Sovereign Gold Bonds were the best form ever offered, with 2.5% interest on top, but no new tranche has been issued since February 2024, so that door is closed to fresh money. Physical coins and bars sit somewhere in between: real, but with storage, purity and resale friction. Jewellery is not on the list at all.

What to do after a tripling

Gold has roughly tripled from its 2019 levels. If your allocation has drifted to 15% or more because of that run, the boring answer is to trim back to your band, selling the winner feels wrong and is usually right. If you hold none, do not chase it at Rs 1.55 lakh in one lump; build the position over a year and accept that you are buying insurance after the fire season has started, which is still better than after the fire.

Every portfolio eventually meets a year when equity falls 30% and the headlines read like the end of the world. Gold’s entire job is to be the one line in your statement that is green that year. Size it for that job, in a form that lets it do the job, and then go back to ignoring it, which is the other thing it is for.