LinkedIn Article | Gold Investment | Portfolio Strategy | Global Economy 2026
Dr. Priyank Bhanshali
Managing Director, Ratnam Jewellery | Real Estate Investor | July 2026
I want to share a perspective on gold that goes beyond my role as Managing Director of Ratnam Jewellery. This is not a pitch for jewellery. This is a conversation about portfolio construction in a world that has become genuinely more uncertain in the last three years – and why gold’s role in a balanced investment portfolio deserves serious reconsideration by Indian investors right now.
Gold delivered over 50 percent returns in rupee terms in 2025. It has outperformed Indian equities, bonds, and currency instruments so far in 2026 according to the World Gold Council’s comparative analysis. India’s gold investment demand jumped 54 percent year on year to 82 tonnes in Q1 2026. Global central banks purchased 244 tonnes of gold in Q1 2026 alone. These are not sentimental numbers. They are portfolio management decisions made by some of the most sophisticated asset allocators in the world. And they deserve to be taken seriously.
THE GLOBAL UNCERTAINTY CASE – WHY IT IS NOT JUST NOISE
Investors have heard the phrase ‘uncertain global environment’ so many times that it has started to feel like background noise. I want to be specific about why 2026’s uncertainty is qualitatively different from what came before – and why gold responds specifically to the type of uncertainty we are currently navigating.
The geopolitical risk landscape in 2026 is more structurally complex than at any point since the Cold War. The US-China strategic decoupling is not a trade dispute that will resolve with a signed agreement. It is a decade-long structural shift that is reshaping supply chains, technology access, and the architecture of global trade. The Middle East remains a source of genuine energy security risk – crude oil prices surged nearly 30 percent at one point in recent months before moderating. The Red Sea shipping disruptions have added 10 to 14 days to Asia-Europe trade routes and driven freight rates to multi-year highs. The dollar-based global financial system is under structural pressure as non-Western economies diversify their reserve holdings.
Each of these factors, independently, would strengthen the case for a gold allocation. Together, they create the kind of sustained, multi-dimensional uncertainty that historically has driven gold to extended periods of strong performance. And critically – most of these factors are not resolved. They are structural. They will not disappear with a single policy announcement or diplomatic agreement.
THE SPECIFIC CASE FOR INDIAN INVESTORS
The case for gold in Indian portfolios has dimensions that are specific to the Indian economic context and that global investment research does not always capture fully.
Currency protection: The rupee has weakened against the dollar in the current environment. Gold, priced in USD globally, provides an automatic rupee-depreciation hedge. When the rupee falls, gold prices in rupees rise. This negative correlation between rupee strength and gold’s rupee-denominated returns means that gold is not just protecting against equity market volatility – it is protecting against the currency risk that most Indian investors carry through their entire portfolio of domestically held assets.
Inflation hedge: Gold has historically maintained purchasing power over very long time periods. In an environment where inflation remains a concern – even as the RBI has managed the headline number, the inflation experience in food, energy, and daily services has been higher for most Indian households – gold’s ability to hold real value is directly relevant.
Portfolio diversification: Gold’s price movements have low correlation with equity markets. The World Gold Council’s analysis shows that across every major market crisis of the last three decades, gold has reduced overall portfolio drawdown and provided capital preservation during the periods when investors most needed it. Adding gold to an equity-heavy portfolio reduces volatility without equivalently reducing returns over time.
Equity market valuation concern: Indian equity markets have seen significant appreciation over recent years. At current valuation levels, the forward return expectations for Indian equities over the next three to five years are more moderate than the returns of the last three to five years. In this environment, the allocation decision between equities and gold tilts more favourably toward gold as a partial substitute for the defensive portion of a portfolio.
THE INSTRUMENTS – HOW TO HOLD GOLD FOR INVESTMENT PURPOSES
This is where I want to be direct: if your objective is investment exposure to gold, buying jewellery is not the most efficient way to achieve it. Jewellery serves other important purposes. But for portfolio investment, the financial instruments are superior.
- Sovereign Gold Bonds for long-term investors: The optimal instrument for investors with a 5 to 8 year horizon. Government-backed. 2.5 percent annual interest on the issue price paid semi-annually. Capital gains exemption at maturity for original subscribers. No storage cost. No making charges. No purity risk. Investors in the 2020 SGB series who received redemption in April 2026 realised gains of over 202 percent in approximately 5 years, in addition to the 2.5 percent annual interest earned. Note: New SGB tranches have not been announced for FY2026-27 – secondary market purchases are available but carry different tax treatment.
- Gold ETFs for shorter-term or more liquid allocations: SEBI-regulated. Physically backed by gold in custodian banks. Traded in real time on stock exchanges. No demat requirement beyond a standard trading account. Ideal for investors who want gold exposure with the ability to exit at short notice. Gains held over 24 months taxed as long-term capital gains.
- Digital gold for micro-investments and accessibility: Useful for very small amounts and for investors beginning their gold investment journey. However, operates without a full regulatory framework – SEBI has flagged concerns. For serious investment allocations, SGBs and ETFs are more structurally sound.
THE REGIONAL AND PERSONALISATION DIMENSION
2025 was described by industry leaders as the year that regionalisation emerged as a defining trend in Indian jewellery. India is not a homogeneous jewellery market. Design preferences in Tamil Nadu are fundamentally different from those in Gujarat, which are different again from those in Bengal, Rajasthan, or Kerala. The brands that grew in 2025 were those that listened to regional preferences and built collections that reflected local cultural vocabulary – not just national trend reports.
This will only intensify by 2030. The customer who wants regional specificity and personalisation now has access to platforms and artisans who can provide exactly that. The jewellery brand that serves them with a standardized national collection and a mass retail experience will lose them to a brand – or an independent artisan – who understands their specific context.
Personalisation at scale is one of the most difficult operational challenges in the jewellery industry. Getting it right requires investment in data systems, in artisan relationships, in design capability, and in the kind of staff training that produces genuine consultation rather than transactional selling. The brands that solve this problem will not just retain customers – they will convert them into advocates who bring their entire families.
HOW MUCH GOLD BELONGS IN A PORTFOLIO
Financial planners generally recommend allocating 5 to 15 percent of a diversified investment portfolio to gold, with gold serving as a portfolio stabiliser and crisis hedge rather than a primary growth asset. In the current environment – elevated geopolitical risk, currency pressure, moderate equity return expectations, compressed fixed income yields – the case for being at or above the midpoint of that range is stronger than usual.
The appropriate allocation depends on individual circumstances. An investor with a long equity holding period, stable income, and limited currency exposure has a different optimal gold allocation than one who is closer to a liquidity event, carries significant currency risk, or is concerned about near-term equity market volatility. These are conversations worth having with a qualified financial advisor – with the understanding that gold deserves a seat at the table in that conversation, not as a cultural asset but as a portfolio management tool.
The sophisticated investor in 2026 is not choosing between gold and equities. They are recognising that a well-constructed portfolio needs both, in proportions that reflect the current risk environment – and right now, that environment favours a meaningful gold allocation.
Gold has been a store of value for five thousand years. In 2026, with the financial instruments now available to Indian investors, it is also a portfolio tool of genuine strategic value. The question is not whether gold deserves attention – the numbers answer that question conclusively. The question is whether your portfolio has been constructed to benefit from what gold is doing right now.
Disclaimer: Views are personal.