LinkedIn Article | Gold Investment | Jewellery Industry | Financial Markets
Dr. Priyank Bhanshali
Managing Director, Ratnam Jewellery | Real Estate Investor | July 2026
I have spent my career in gold. At Ratnam Jewellery, we have watched generations of Indian families walk through our doors – for weddings, for festivals, for milestones. Gold has always been more than metal in Indian culture. It carries memory, it carries aspiration, it carries security.
But something has shifted in the last three to four years that goes well beyond sentiment. Gold has become a serious, structured, evidence-backed financial asset – and Indian investors are recognising this faster than most global markets.
In the first quarter of 2026 alone, India’s gold investment demand rose 54 percent year on year to 82 tonnes, according to the World Gold Council. Digital gold transaction values nearly quadrupled during the same period. Gold delivered stellar returns in 2025 – rising over 50 percent in rupee terms year to date. The RBI raised India’s gold holdings to 880 tonnes in 2025, with gold now accounting for 13.9 percent of total reserves. These are not cultural numbers. These are financial numbers. And they demand a financial conversation.
WHY GOLD IS OUTPERFORMING IN 2026
The World Gold Council published research in March 2026 noting that gold stands out as a notable outperformer against Indian equities, bonds, and currency instruments in the current environment. The INR has weakened. Capital inflows have been subdued. Equity valuations have moderated. Yields on debt instruments have been compressed by monetary easing. Against all of this, gold has delivered.
The reasons are structural, not coincidental. Ongoing geopolitical tensions – in the Middle East, in the South China Sea, in global trade corridors – have increased demand for safe-haven assets. Global central banks collectively purchased 244 tonnes of gold in Q1 2026. When central banks are buying at this pace, they are not making a sentimental decision. They are making a reserve management decision. And that institutional demand sets a floor under the price that individual investor sentiment cannot.
For Indian investors specifically, there is an additional layer that makes gold uniquely valuable: currency risk. Gold is priced globally in US dollars. When the rupee weakens against the dollar, gold prices in rupees rise, providing a natural hedge against currency depreciation that no domestic fixed income instrument can replicate. In a year where the rupee has been under pressure, gold’s rupee performance has been amplified precisely because of that relationship.
HOW THE INVESTMENT LANDSCAPE FOR GOLD HAS EVOLVED
What has changed most fundamentally is not why people invest in gold – it is how. The financial system has introduced structured alternatives to physical gold that solve for every friction point that previously made physical gold an inefficient investment.
Sovereign Gold Bonds (SGBs): Issued by the RBI on behalf of the Government of India, SGBs provide gold price exposure plus a fixed 2.5 percent annual interest payment – something physical gold cannot offer. Investors who subscribed to the 2020 SGB series saw their bonds redeemed at Rs 15,254 per unit in April 2026 against an issue price of Rs 5,051 – a return of over 202 percent, plus the interest earned over the holding period. SGBs held to 8-year maturity also carry a capital gains exemption for original subscribers under current tax rules. No storage costs. No making charges. No purity risk. Government backed.
Gold ETFs: Traded on stock exchanges in real time, Gold ETFs provide liquid, regulated, demat-held gold exposure at any ticket size. They are SEBI-regulated, physically backed by gold held in custodian banks, and verified by auditors every six months. Gains held over 24 months are taxed as long-term capital gains. Gold ETFs are the right choice for investors who want full liquidity and the ability to respond to market movements without waiting for a fixed redemption window.
Digital Gold: Platforms like PhonePe, Paytm, and Google Pay allow purchases from as little as Re 1, stored in secure vaults with physical delivery options. Accessible, convenient, and appealing to first-time investors. However, digital gold currently operates in a regulatory grey zone – SEBI has flagged concerns about the absence of investor protection frameworks. For serious investment purposes, SGBs and Gold ETFs are more structurally sound instruments.
WHAT THIS MEANS FOR JEWELLERY BUYERS SPECIFICALLY
In my experience, the most sophisticated gold buyers in India are those who think about both dimensions simultaneously. They buy fine jewellery for its cultural role, its craftsmanship, and its emotional weight. They buy financial gold instruments – SGBs, ETFs – for their portfolio’s risk management and inflation protection role. These are not competing decisions. They serve different purposes.
The mistake is treating all gold purchases as interchangeable. Jewellery carries making charges of 10 to 25 percent over the gold value, which makes it an inefficient pure investment vehicle – you pay a significant premium at purchase and recover less at resale. This does not make jewellery a poor decision. It makes it the right decision for the right purpose – and SGBs or ETFs the right decision for pure investment exposure to gold price movements.
THE MACRO CASE FOR HOLDING GOLD NOW
Financial planners generally recommend allocating 5 to 15 percent of a diversified investment portfolio to gold. At current market conditions – where equities are moderately valued, fixed income yields have been compressed, the rupee faces external pressure, and global geopolitical uncertainty remains elevated – the case for being at or above the midpoint of that range is stronger than it has been in several years.
Gold has historically shown strong resilience during episodes of systemic risk, often delivering positive returns precisely when other assets are declining. This negative correlation with equities is not an accident – it is the core mechanism that makes gold valuable as a portfolio stabiliser. When everything else falls, gold tends to hold or rise, reducing overall portfolio drawdown and providing the capital preservation that allows investors to stay invested through market stress without being forced to sell other assets at distressed prices.
India imported approximately 800 tonnes of gold in FY25. Domestic household gold holdings are estimated to exceed 25,000 tonnes – more than the reserves held by the top six central banks combined. India’s relationship with gold is not going to change. What is changing is how intelligently that relationship is being structured. The shift from purely physical gold to a mix of physical, SGB, and ETF is a rational financial evolution – and one that benefits both individual portfolios and the country’s foreign exchange balance.
The most financially sophisticated approach to gold in 2026 is not choosing between jewellery and investment gold. It is understanding that they serve different purposes – and that your allocation to each should reflect those purposes clearly.
MY PERSPECTIVE FROM THE INDUSTRY
At Ratnam Jewellery, we believe that understanding gold in all its dimensions makes for better decisions – whether you are buying a piece for your daughter’s wedding or structuring your portfolio for the next decade. These two decisions inform each other. A customer who understands gold’s financial properties makes more informed jewellery purchase decisions too. And an investor who understands gold’s cultural significance understands why demand floors in India are structural, not cyclical.
The conversation around gold in India has matured significantly. I am glad to be part of an industry that is contributing to that maturity – not by positioning gold purely as tradition, but by helping people understand that tradition and financial intelligence are not opposites. In this case, they are deeply complementary.
Gold is no longer just something your family passes down. It is something your portfolio needs.
Disclaimer: Views are personal.