Investing in gold this Akshaya Tritiya, which falls on Sunday, can bring discipline to build long-term wealth. Spreading purchases over time averages out costs and reduces the risk of buying at market peaks.
Gold has delivered strong returns from one Akshaya Tritiya to the next, averaging around 30% annually over the past five years.
Sunil Katke, national head of commodities retail business, Kotak Securities, says investing a sum during Akshaya Tritiya to align with traditional buying sentiment and adding gradually on price dips over the next few months, and topping up closer to Diwali or during a meaningful correction helps reduce timing risk.
After the sharp rally over the past year, prices are at elevated levels, which makes a phase of consolidation or a mild correction of around 5–10% quite possible. Instead of trying to time the market perfectly, a staggered investment approach works better. “We are already seeing a shift in behaviour where buyers are opting for smaller, phased purchases rather than lumpsum buying, using volatility to their advantage while staying aligned with India’s seasonal demand cycles,” he says.
Gold outlook
Gold has seen a strong rally supported by global uncertainty, central banks buying as a hedge against global uncertainty and increased safe haven demand. However, gold prices have seen a pull-back because of rising interest rate expectations and a broad flight to cash because of the geopolitical tensions in West Asia.
Rather than a sharp decline, a more likely scenario is range bound movement with intermittent dips, which can actually be healthy for the next phase of the rally. “For investors, this creates an opportunity to adopt a buy-on-dips strategy between Akshaya Tritiya and Diwali, using gold as a diversifier that balances portfolio risk rather than as an aggressive return driver,” says Katke.
From a portfolio construction standpoint, gold’s role as a diversifier is still structurally strong. Chirag Mehta, chief investment officer, Quantum AMC, says the recent correction in gold has improved the entry point. “A target allocation of 15-20% can be considered,” he says.
Ways to invest
On the choice of investment products, a differentiated approach is recommended based on investor objectives. As gold prices remain elevated, consumers are opting for lightweight jewellery. Pre-booking, especially for gold and silver coins, is emerging as a preferred route for many consumers to lock in prices.
Gold exchange traded funds (ETFs) are an efficient way to invest in the metal as they are backed by physical gold, and are free from the hassles of making charges and storage costs. Gold ETFs provide liquidity and flexibility, while physical gold as jewellery is more a consumption choice than an investment.
For long-term investors, Sovereign Gold Bonds make sense because they offer an annual interest of 2.5%, besides tax efficiency for original subscribers. Investors can buy these bonds from the secondary market now and get an attractive combination of potential price value and an additional fixed yield, but at times they are quoted at a premium.
This Akshaya Tritiya, investors can look beyond gold and consider silver as a strategic addition. Gold should continue as the core holding (75–80% of the precious metals basket), while silver can form a 20–25% tactical allocation, accumulated selectively and held with a horizon of two-plus years.