Gold prices in India breached the Rs 1,00,000 per 10 grams mark (24-karat) on 18 March 2026, setting a historic milestone. The yellow metal has been on a relentless rally, gaining over 50% in the past 12 months alone, outperforming both the Nifty 50 (which returned 16%) and fixed deposits (7%). By early April, prices surged further to Rs 1,51,000, making gold the best-performing major asset class in India over any trailing period from 6 months to 3 years.
Why Gold Is at All-Time Highs
Three structural forces are pushing gold higher. First, central banks worldwide, led by China, India, and Turkey, have been buying gold at record levels. The RBI alone added 80 tonnes to its reserves in calendar year 2025, the highest annual purchase in decades. Central bank buying provides a structural demand floor that supports prices even during periods of risk-on sentiment in equity markets.
Second, geopolitical tensions across multiple regions have sustained safe-haven demand throughout 2025-26. Third, the US Federal Reserve's rate cuts in the second half of 2025 weakened the dollar significantly, pushing international gold above $3,100 per troy ounce and boosting demand from emerging market buyers including India.
Should You Invest in Gold at Rs 1 Lakh+?
Financial planners generally recommend a 5-15% allocation to gold in a diversified portfolio. At current prices, even a small 10-gram coin costs over Rs 1.5 lakh — making physical gold inaccessible for many. Gold ETFs (invest from as little as Rs 150 for 0.01 grams), gold mutual funds via SIP, and Sovereign Gold Bonds on the secondary market offer more practical entry points.
SGBs remain the most tax-efficient route, offering 2.5% annual interest on top of gold price appreciation, with complete capital gains tax exemption if held to maturity (8 years). However, new SGB issuances have been limited in FY26 due to the government's rising redemption costs at current gold prices.
Gold vs Equity: Historical Context
Over the past 20 years, gold has now delivered approximately 13.5% annualised returns in rupee terms — slightly ahead of the Nifty 50's 13.2% CAGR, reflecting the recent surge. Gold's value proposition was traditionally portfolio diversification, not outperformance. But the 2024-26 rally has challenged that narrative. During the October 2024 to January 2025 equity correction, gold gained 18% while mid-cap indices fell 15%. A portfolio with 10% gold allocation would have significantly reduced drawdown during that period.
Source
India Bullion and Jewellers Association (IBJA), World Gold Council