Smart ways to make the most of the gold and silver rally

For households that traditionally buy gold during Dhanteras and Diwali, the rally is both exciting and a little intimidating

Gold and silver prices have been on a steady climb this year, with both metals touching new highs in India. For households that traditionally buy gold during Dhanteras and Diwali, the rally is both exciting and a little intimidating. The question is simple: how do you ride the surge without putting your savings at risk?

Why gold and silver are soaring

Global investors are turning to safe havens as inflation, currency swings, and geopolitical tensions dominate markets. In India, festive and wedding season demand has added more fuel. Silver, often called “poor man’s gold,” has followed the same upward path, buoyed by industrial demand from electronics and renewable energy sectors.

Buying jewellery vs. investment gold

If you’re buying jewellery for the festive season, remember that making charges and GST make it more expensive than investment gold. Coins and bars are better if you’re looking at gold as a pure asset. For those who prefer convenience, sovereign gold bonds (SGBs) and gold exchange-traded funds (ETFs) offer exposure without worrying about storage.

Silver’s growing appeal

Silver is not just decorative—it’s increasingly used in solar panels and electric vehicles. That gives it a dual demand: industrial and investment. Investors can buy silver bars, coins, or ETFs, but should note that silver prices are more volatile than gold.

Avoid going overboard

While it’s tempting to chase prices during a rally, experts suggest keeping gold and silver at 10–15% of your overall portfolio. Overloading on them could mean missing out on higher-growth assets like equities.

Timing your entry

Trying to time the market perfectly is impossible. A better strategy is staggered buying—spreading purchases across weeks or months. This way, you average out the cost and reduce the risk of buying at a peak.

FAQs

1. Is it better to buy physical gold or gold ETFs now?

If your goal is long-term investment, ETFs or sovereign gold bonds are more efficient than jewellery since they avoid making charges and offer easier liquidity.

2. Should I invest in silver instead of gold?

Silver can deliver strong returns but is more volatile. It’s better to use it as a small addition to your portfolio rather than replacing gold entirely.

3. How much gold or silver should I hold in my portfolio?

Experts generally advise limiting it to 10–15% of your total investments for balance and diversification.