Gold Hits Record Highs Ahead of Akshaya Tritiya, But Experts Urge Balanced Investing
April 25, 2025 — As Akshaya Tritiya approaches, the traditional buying frenzy for gold is meeting a perfect storm of market momentum. Gold prices have surged an astonishing 47% over the past year, with international rates climbing from $2,285 per ounce in April 2024 to $3,371 in April 2025. In India, spot prices have touched ₹99,000 per 10 grams—nearly double their mid-2022 levels.
Fueling this rally are several global and domestic factors: interest rate cuts by the US Federal Reserve, geopolitical uncertainty, a weakening dollar, and a surge in gold buying by central banks. In fact, over 1,000 tonnes of gold were accumulated globally last year amid growing skepticism around dollar reserves, particularly following sanctions on Russia. Back home, gold has outshined the Sensex by 18% in Q1 2025—a rare divergence seen only a dozen times in the past five decades.
Despite the glitter, financial experts are cautioning investors against putting all their eggs in the gold basket.
“Think of gold as insurance, not an engine of growth,” says Dhirendra Kumar, CEO of Value Research. “It’s essential, but not something you should overload your portfolio with.”
Gold, while seen as a safe haven during uncertain times, does not generate income like equities. It neither pays dividends nor contributes to long-term capital growth. Most advisors recommend capping gold exposure at around 10% of a diversified portfolio.
For those still keen on investing during the festive season, experts suggest steering clear of physical gold due to concerns like storage, making charges, and low liquidity. Instead, investors are encouraged to consider smarter alternatives such as:
- Sovereign Gold Bonds (SGBs): Offering 2.5% annual interest along with potential price appreciation and tax-free returns at maturity.
- Gold ETFs and Mutual Funds: These provide convenient, secure, and liquid access to gold, ideal for modern, digital-savvy investors.
Top domestic options include Nippon India Gold BeES, SBI Gold ETF, Kotak Gold ETF (0.55% expense), and ICICI Prudential Gold ETF (0.5%). Global investors may consider iShares Gold Trust, SPDR Gold Shares, and VanEck Gold Miners ETF.
Additionally, for those looking to diversify internationally, experts point to European-focused funds such as the FEZ SPDR Euro Stoxx 50 ETF and VGK Vanguard FTSE Europe ETF. Individual stock picks like Novo Nordisk, ASML, and European defense players also present strategic opportunities.
Historically, broader markets have outperformed gold over the long term. The S&P 500 has returned approximately 12% CAGR since the 1960s, while India’s Sensex has delivered around 15% since 1979. The US dollar, too, has appreciated 3–4% annually, enhancing returns on global investments.
Market watchers warn that gold typically experiences sharp spikes after prolonged periods of dormancy, often followed by corrections. To navigate such volatility, financial planners recommend rupee cost averaging—a disciplined approach of investing small, consistent amounts over time.
As households celebrate Akshaya Tritiya with traditional gold purchases, financial experts urge a modern twist: let gold shine in your portfolio—but don’t let it blind you to the importance of diversification.
