Indian Investors Weigh Gold Options Amid Regulatory Shifts
Financial experts advise Indian investors to limit gold holdings to 15% of portfolios while navigating new tax rules and the end of Sovereign Gold Bonds.
Gold has delivered an annualized return of 14.6% over the last 20 years, serving as a hedge against equity market volatility. However, financial advisers recommend that investors limit gold exposure to 10-15% of their total portfolios due to varying returns by purchase year.
The Reserve Bank of India has ceased the issuance of Sovereign Gold Bonds, which are now subject to new tax regulations following Budget 2026. This shift has pushed investors toward other vehicles, though each carries distinct risks. Gold coins involve high making charges and GST, while digital gold remains unregulated with significant price spreads.
Gold ETFs, regulated by the Securities and Exchange Board of India, are currently trading at premiums because unit creation is restricted. Experts suggest that these ETFs or multi-asset mutual funds provide the most effective balance of liquidity and regulation for the average investor.
