If you have been living under a rock for the past 2–3 years and stepped out today wondering why the world — and even your neighbour — is suddenly talking about soaring gold prices, here’s what’s driving the buzz.
Gold prices have hit the roof and shattered all previous all-time high records. Gold is up over 200% in the last 3 years, with the gold price quoting around Rs 1.60 lakh per 10 grams in major Indian cities.
Taking a diversion from gold’s performance and outlook, let’s dig deeper to see what makes gold worth having in your portfolio in the first place.
Where Did All This Gold Actually Come From?
Gold has been part of human civilization since time immemorial. Besides being a wearable as jewellery, gold has also been put to some good use in several industrial activities by humans.
Ever wondered where the gold that we are all rolling over came from? Let us take a ride on a time machine to understand it better.
Gold has been on Earth for more than a billion years, not just thousands or millions. There could be various theories and speculations around the origin of gold, but scientists seem to have demonstrated that gold on Earth originated from debris of ‘dead stars’ that settled below the planet’s core.
Whether it is the Big Bang theory or the theory that supports ‘Collision of stars’, which led to the origin of gold, the question is, how did they get to the upper crust of the Earth?
Well, a theory suggests that around 4 billion years ago, asteroids hit our planet on several occasions, causing the stirring of the planet’s layers, leading to gold being pulled up into the mantle and crust layers of Earth.
Gold, therefore, can also be found in rock ores, and as it tends to sink due to its weight, it gets accumulated in stream beds, alluvial deposits, and the ocean. Earthquakes and volcanoes do the other heavy lifting in bringing gold from the core to the uppermost layers of the Earth. The gold mines take it from there and do the groundwork to unearth gold from the outermost layers.
A bit of science – Earth’s outermost layer is the crust, while the mantle is the middle layer and the dense, metallic core is the center.
How Much Gold Has Been Mined So Far
So far, about 244,000 metric tons of gold have been discovered. Of this 187,000 metric tons have been produced, while there are another 57,000 metric tons of underground reserves waiting to be unearthed. The most interesting thing is that of all the gold discovered so far, if melted, it would fit in a cube approximately 23 metres or 75.5 feet wide on every side.
So, Who’s Digging Up All This Gold?
Gold mining is pretty much everywhere; every continent except Antarctica has some form of it, ranging from massive industrial operations to small-scale setups. Every year, the world digs up around 3,600 tonnes of gold and the big players right now are China, Russia, and Australia. India’s been making some exciting moves too, with fresh gold deposits discovered in Odisha, Madhya Pradesh, and Andhra Pradesh in 2025. China accounts for roughly 10% of all the gold pulled out of the ground worldwide.
Who Owns The Most Gold
Central banks, billionaire investors, and the average person are all likely to own gold. As of December 2024, the USA held the highest gold reserve of 8,134 tonnes, followed by Germany. Way behind are China and India with 2,280 tonnes and 880.18 metric tonnes of gold in their reserve, respectively.
When it comes to gold, Indian households are thought to hoard the most. According to some estimates, Indian families own over 24,000 tons of gold. That is approximately equal to the combined holdings of all the world’s central banks. In comparison, Chinese households are believed to own 20,000 tonnes of gold.
Some of the most well-known investors, including John Paulson, Eric Sprott, George Soros, and Ray Dalio, strategically invest in gold to diversify their portfolios.
Gold in Your Portfolio
Gold is called the ‘currency of last resort’ as it lacks counterparty risk and is not printed by any central bank. As a finite physical asset, it protects wealth against currency depreciation or inflationary periods. Gold is surging amid geopolitical tensions, but know your long-term goals before you jump in.
There’s no fixed percentage for allocating your investments into gold. However, as a thumb rule, one may consider taking 10-15% exposure in gold, especially through gold exchange traded funds (Gold ETFs), as they offer liquidity, low-cost and track the cost of physical gold closely.
Will the gold price rise more? Well, nobody knows. Gold prices may continue to rise if the factors behind the initial surge remain valid, despite typical corrections and dips associated with any asset class.