Gold in 2026: How much should you hold in your portfolio and is now the right time to invest?

Gold has once again become a key part of our investment conversations this year. Owing to global uncertainty and global uncertainty, investors are once again using hold to hedge their portfolio. But the real questions are whether you should consider investing in gold now? how much gold you should hold in your portfolio and which investment option should you choose? Here are some key question answered.

Why should you invest in gold?

Here are some key reasons why should you invest in gold along with stocks and bonds:

• During global turmoil, political upheaval or when financial markets fall sharply, people can rely on gold since it is not tied to a specific government or corporation.
• Gold has historically acted as a hedge against infaltion. When the value of fiat currencies - dollar, pound - it helps preserve your purchasing power.
• Gold often moves differently from equities and debt, hence, it can be considered as a smart way to diversify your portfolio

‘Gold should be used as a hedge in your portfolio’

Gold deserves a place in a portfolio, but only as a hedge. One may maintain exposure in the 5–10% range via ETFs for tactical flexibility, as SGBs are currently not issued, said Arijit Sen, SEBI Registered Investment Adviser, Co-Founder, Merry Mind.

“In today’s market, modest additions make sense—but discipline in allocation is the key. Over-allocation dilutes long-term wealth creation potential.”

Different ways to invest in gold:

Gold ETFs: These offer the opportunity to invest in gold without physically buying or storing it. Gold ETFs funds track gold prices and are traded on stock exchanges, owing to they offer the ease in buying, selling, and better liquidity.

Gold mutual funds: Gold mutual funds are a category of mutual fund that invest in Gold ETFs or in companies engaged in gold mining and production. Their returns are linked to to the performance of gold prices.

Physical gold: Investing in physical gold means owning the metal directly - coins, bars or jewelry. However, financial planners usually discourage treating jewellery as an investment, especially because they includes a markup for craftsmanship, which reduce overall returns.

Digital gold: Digital gold, often refered as paper gold, is similar to physical gold, but it is bought online instead of in physical form. The gold is stored securely in a vault by the issuer on behalf of the investor. However, unlike other financial products, it is not regulated by the Reserve Bank of India or the Securities and Exchange Board of India. Hence, considered a risky asset.

But should you invest now?

In the current environment of global uncertainty, inflationary pressures, and currency volatility, gold continues to play its traditional role as a hedge. But sen raises a pertinant question, it is not about the fact whether gold has value now - rather - it is how much to hold, through which instrument, and whether now is the right time to add exposure.

“Until recently, Sovereign Gold Bonds (SGBs) were the most efficient instrument—backed by the Government of India, offering 2.5% annual interest and tax-free capital gains on redemption. However, new issuances have been discontinued, meaning fresh investors cannot access this route.”

Noting that Gold prices are high currently, reflecting global risk aversion and central bank accumulation, Sen advises, “For investors who lack diversification, incremental allocation now is justified. However, avoid lump-sum purchases at high prices; staggered entry through ETFs.”