Gold has quietly delivered one of the most powerful runs of the decade.
Since 2020, the price of gold in India has climbed from around ₹39,000 per 10 grams to over ₹1,15,000 today, a gain of nearly 200% in just five years. On a compounded basis, that works out to an annual return of about 24%.
To put that in perspective, the Nifty 50 – India’s benchmark equity index – returned roughly 17% CAGR over the same period. Gold, an asset often dismissed as “safe but dull,” has actually outperformed equities on a pure performance basis.
Yet, despite this rally, many investors missed the bus. Some kept waiting for a correction that never came. Others dismissed gold as an old-fashioned asset, overshadowed by the excitement of stocks, startups, and crypto. Only now, with the yellow metal trading at historic highs and families realizing the hidden wealth in their bangles and coins, are people waking up to what they overlooked.
This stupendous rise is not a mystery in hindsight. It is a result of rising inflation, a weakening rupee, and waves of global uncertainty that drove investors towards safety. Central banks were also heavy buyers, building up gold reserves, which added further fuel to the rally.
The question now is not just how gold rose, but what it means for Indian households who have always seen gold as both ornament and insurance, and for investors who are rethinking how much space it deserves in their portfolio.
Why gold surged so sharply
Looking back, the reasons for this climb feel obvious, but they were not so clear when the rally began. Gold thrives when people are uncertain, and the past four years were a masterclass in uncertainty.
- Inflation and currency weakness: Everyday prices rose, and the rupee slid against the US dollar. Since gold is priced in dollars globally, each notch of depreciation made it more expensive at home. For Indian buyers, that meant paying more rupees for the same gram of gold, even if global prices stayed flat.
- Global shocks and safe-haven demand: The pandemic, wars, and supply chain disruptions made investors worldwide nervous. Each flare-up sent more money rushing into gold, strengthening its role as the world’s oldest form of insurance.
- Central bank buying: Behind the scenes, central banks were quietly stockpiling. According to the World Gold Council, global central bank purchases hit multi-decade highs, signaling trust in gold at the highest levels of finance.
- Low interest rates: When central banks cut rates during the pandemic, bonds and deposits stopped looking attractive. Gold, which does not pay interest, suddenly seemed less of a sacrifice and more of a store of value.
The combination of these forces created a rare alignment in gold’s favor. It was not just a defensive hedge anymore – it became one of the best-performing assets in the world. And while many ignored it, those who simply held on to family jewelry or bought a small bar every festival saw their wealth quietly compound at a pace that even equity benchmarks could not match.
Who benefited from gold’s run
The winners from this rally came in three very different groups – jewellers, households, and investors.
Jewellers and business families saw their fortunes multiply. The latest Hurun India Rich List 2025 shows how powerful the gold wave has been. The jewellery sector added 25 new billionaires this year, and veteran names like Joy Alukkas saw their net worth swell to ₹88,430 crore . The old perception of jewellers as small family-run operators has given way to national and global business empires, built on the back of India’s appetite for gold.
Indian households – the world’s largest private holders of gold – were another big beneficiary. With an estimated 25,000 tonnes of gold stored in Indian homes and lockers, families that had quietly accumulated jewellery or coins saw their wealth double in value . For many, this surge was invisible until recently, when revaluations for weddings or loans revealed the scale of gains. Suddenly, bangles and coins tucked away for tradition became financial assets that outperformed most investments.
Individual investors also discovered new ways to ride the rally. Gold ETFs and Sovereign Gold Bonds attracted record inflows as younger investors who did not want to hold jewellery turned to digital and paper forms of gold . Even gold loan companies benefited, as higher prices meant households could borrow more against their jewelry in times of need.
In short, gold’s 300% rise reshaped wealth across the spectrum – lifting billionaires, validating family traditions, and offering a safety net for ordinary investors.
What it means for your portfolio
Gold’s surge is a reminder of why it has always had a place in Indian savings, but it is also a caution against getting carried away. I often remind myself of three simple points.
First, gold is a diversifier, not the whole plan. Financial planners suggest gold should make up about 5 to 10% of a portfolio. It balances the risk of equities and other assets, but it cannot build long-term wealth alone. Beyond a certain point, too much gold means missing out on the compounding power of businesses and equity markets.
Second, how you buy gold matters. Jewellery carries making charges, purity concerns, and emotional attachments that can reduce its financial efficiency. If the intent is investment, coins, bars, Gold ETFs, or Sovereign Gold Bonds are better. These options cut costs, remove storage worries, and in the case of SGBs, even add interest income.
Third, think long term. Gold does not generate cash flows, so its price can stay flat for long stretches. For example, after the sharp rise in 2020, gold was quiet for nearly two years. Treating it as a tactical trade often leads to disappointment. Holding it as part of a steady allocation works far better, especially through uncertain cycles.
For me, the lesson is not to chase gold after its run, nor to dismiss it as old-fashioned. It is to see it for what it is: a safety net, a cultural anchor, and a portfolio stabiliser. If you missed the bus on this rally, it is not the end of the story. Gold will continue to play its role, quietly and steadily, in protecting wealth when the world feels uncertain.
A final word
This phase of gold’s rally reminds me that even the most traditional assets can turn into powerful protectors of wealth when you least expect it.
The message is clear. Do not ignore gold. But also do not over-rely on it. Review your portfolio and ask yourself: How much of my wealth is in gold, and in what form? If it is less than 5%, consider adding gradually through efficient formats like ETFs. If it is more than 20%, think about whether you are overexposed and missing out on growth from other assets.
Gold has already proven itself over the last four years. The question now is whether you can use that lesson wisely for the future. Build balance. Diversify. And make sure that the next time gold shines, you are not left saying you missed the bus.
Author note
Note: This article relies on data from fund reports, index history, and public disclosures. We have used our own assumptions for analysis and illustrations.
The purpose of this article is to share insights, data points, and thought-provoking perspectives on investing. It is not investment advice. If you wish to act on any investment idea, you are strongly advised to consult a qualified advisor. This article is strictly for educational purposes. The views expressed are personal and do not reflect those of my current or past employers.
Parth Parikh has over a decade of experience in finance and research. He currently heads growth and content strategy at Finsire, where he works on investor education initiatives and products like Loan Against Mutual Funds (LAMF) and financial data solutions for banks and fintechs.