Gold prices in India have surged past Rs 1,51,000 per 10 grams (24-karat) in the first week of April 2026, according to data from the India Bullion and Jewellers Association (IBJA). The 22-karat rate stands at approximately Rs 1,38,350. This represents a staggering 75 percent rise from Rs 86,000 levels just 18 months ago, making gold the single best-performing major asset class in India over this period — outperforming equities, fixed deposits, and real estate by a wide margin.
What Is Driving Gold to Record Highs
The rally to Rs 1.5 lakh has been fuelled by an unprecedented confluence of global factors. Central bank gold purchases hit a record 1,136 tonnes in calendar year 2025, according to the World Gold Council, with the Reserve Bank of India itself adding 72 tonnes to its reserves. Geopolitical tensions across multiple regions have sustained safe-haven demand throughout late 2025 and into 2026. The US Federal Reserve's rate cuts in the second half of 2025 weakened the dollar, pushing international gold prices above $3,100 per troy ounce — the highest in history.
Domestically, the reduction of customs duty on gold from 15 percent to 6 percent in the Union Budget 2024-25 improved price competitiveness. Gold ETF inflows in India crossed Rs 18,000 crore in FY26, a 55 percent increase over FY25 per AMFI data. Sovereign Gold Bond (SGB) redemptions at maturity delivered tax-free gains of over 120 percent for investors who bought during the 2018-19 tranche series.
Gold as a Portfolio Diversifier at Rs 1.5 Lakh
Gold's primary value in a portfolio is diversification, not growth. Over the past 20 years, gold has delivered a CAGR of approximately 13.5 percent in rupee terms — now slightly ahead of the Nifty 50's 13.2 percent CAGR over the same period, reflecting the recent surge. Gold's correlation with Indian equities has historically been low at around 0.15 over rolling five-year periods, meaning it tends to hold or rise in value when equities fall. During the October 2024 to January 2025 correction, gold gained 18 percent while mid-cap and small-cap indices corrected 12 to 18 percent.
This counter-cyclical behaviour makes gold an effective portfolio stabiliser. A portfolio with 10 percent gold, 60 percent equity, and 30 percent debt has historically delivered a superior risk-adjusted return (higher Sharpe ratio) than a portfolio without gold, even though the absolute return may be marginally lower in bull markets.
How to Invest in Gold in 2026
Physical gold (jewellery, coins) carries making charges of 8-25 percent and storage costs that erode returns significantly. At Rs 1.5 lakh per 10 grams, even a small coin costs Rs 75,000 or more. For investment purposes, consider these alternatives. Gold ETFs offer real-time liquidity and are available on the NSE and BSE with expense ratios as low as 0.3 percent — you can invest as little as 0.01 gram (roughly Rs 150). Gold mutual funds (fund-of-funds that invest in gold ETFs) are suitable for SIP-based accumulation without requiring a demat account. Sovereign Gold Bonds (SGBs), while currently issued irregularly, offer a 2.5 percent annual interest over and above gold price appreciation, with tax-free capital gains if held to maturity.
Digital gold through platforms like Paytm, PhonePe, and MMTC-PAMP is another option, though investors should be aware of the higher spread (buy-sell difference of 3-5 percent) and the absence of SEBI regulation for this product category.
Should You Buy Gold at Rs 1.5 Lakh?
Timing gold purchases is notoriously difficult — investors who thought Rs 70,000 was "too expensive" in early 2024 have watched the price double. Rather than making a large lump-sum buy at the current elevated price, consider a systematic approach. A monthly gold SIP of Rs 2,000 to Rs 5,000 in a gold mutual fund allows you to average your purchase price over time and avoids the regret of buying at a short-term peak.
The recommended allocation to gold for most Indian investors is 5 to 15 percent of the total portfolio, depending on risk appetite and existing asset mix. If you already hold significant gold in the form of jewellery, your effective gold allocation at current prices may be much higher than you realise — a 50-gram necklace purchased years ago is now worth over Rs 7.5 lakh. Use our Gold Calculator to estimate the current value of your gold holdings and evaluate whether additional investment is warranted. Gold is a marathon asset: its role is to protect your portfolio during crises, not to generate the highest returns in normal markets.
Source
India Bullion and Jewellers Association (IBJA), World Gold Council Q1 2026 Report, AMFI Gold ETF Data