Why Gold and Silver Are Emerging As Core Portfolio Assets For Indian Investors Amid Global Uncertainties

By Anirudh Garg

Just a few years ago, gold was seen as a backup plan -something to fall back on during market crashes or global crises. Today, that perception is changing fast. In 2025, gold isn’t just a crisis hedge, it’s becoming a core part of investment strategies, especially among Indian high-net-worth individuals (HNIs) and family offices.

Across wealth firms and family offices in Mumbai, Bengaluru, and Delhi, the conversations are shifting. Investors aren’t asking, “Should I add gold?”, they’re asking, “How much gold should I be holding long term?” The message is clear: gold has gone from optional to essential.

A More Unstable World, A Stronger Case for Gold

The world today feels more unpredictable than it did just a year ago. The Iran–Israel conflict has raised fears of a broader Middle East crisis. The war in Ukraine shows no signs of ending. Tensions are rising between the US and China over Taiwan and the South China Sea. And with all this, oil prices are rising and inflation is back in focus.

All these risks have made investors nervous and more importantly, more thoughtful. In such a climate, assets that can hold their value regardless of political or economic shocks become more valuable. Gold, unlike stocks or government bonds, doesn’t rely on the success of any single country or central bank. It’s not tied to any one currency or government.

That makes it uniquely useful in today’s divided, unpredictable world.

What Central Banks Are Doing Speaks Volumes

If you really want to know what’s going on behind the scenes, look at what central banks are doing—not just what they’re saying. According to the World Gold Council’s June 2025 report, central banks bought a massive 1,086 tonnes of gold in 2024. In just the first three months of 2025, they’ve already bought 244 tonnes—a 25 per cent jump over the five-year quarterly average.

More strikingly, 95 per cent of central banks now say they plan to buy more gold over the next year. That’s up from 81 per cent last year. These are institutions managing billions in reserves—and they’re clearly signaling a shift.

China is leading the way. Its central bank has increased gold holdings from around 1,850 tonnes in 2018 to 2,296 tonnes by May 2025. It’s a sign of growing caution about US Treasuries and dollar assets—especially in a world where sanctions and political pressures can freeze financial systems overnight.

Also Read : Oil Prices, Inflation, And Your Portfolio: What Indian Investors Need to Know As Israel-Iran Tensions Rise

What Indian Investors Are Doing Differently

Indians have always had a deep cultural connection with gold. But now, that connection is becoming more financial and more strategic.

Gold is moving from lockers to portfolios—and from jewellery to Sovereign Gold Bonds (SGBs), ETFs, and digital gold. According to data from the Association of Mutual Funds in India (AMFI), gold ETFs saw over Rs 1,800 crore in inflows in FY 2024–25, more than double the previous year.

Advisors are now recommending that investors allocate between 5–10 per cent of their total portfolios to gold and silver—not for emergencies, but as a permanent allocation. Family offices are also exploring professional strategies that include precious metals alongside equity, fixed income, and real assets.

Don’t Sleep on Silver

While gold is getting all the headlines, silver is quietly having a moment of its own. Silver plays a huge role in industries tied to the future: electric vehicles, solar panels, 5G networks, and more.

A 2024 study by The Silver Institute shows global industrial demand for silver is growing fast and expected to rise 15 per cent annually through 2027. For investors, silver offers a rare mix: like gold, it’s a safe haven—but unlike gold, it also rides on long-term tech and green energy trends.

 When Both Gold and the US Dollar Go Up, Pay Attention

One of the most unusual trends in 2025 is that both gold and the US dollar are rising together. This doesn’t usually happen—gold often rises when the dollar falls, and vice versa. So why is it happening now? Because investors are starting to worry not just about inflation or interest rates—but about the system itself. High global debt, uncertain monetary policy, political instability—these risks are making both gold and the dollar attractive for very different reasons.

It’s a strong signal that investors want to hold assets that are resilient, reliable, and ready for any scenario.

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From Backup Plan to Core Strategy

Gold isn’t just an emergency parachute anymore. It’s being built into the foundation of serious portfolios. Major global wealth managers like JP Morgan Private Bank and UBS now recommend that clients hold 5–10 per cent of their wealth in gold. Research from Oxford Economics shows that portfolios with a steady gold allocation tend to perform better during periods of global stress, without sacrificing long-term returns.

In India, where inflation is structurally higher and the rupee faces regular pressure, this argument becomes even stronger.

Gold for the Real World, Not Just the Headlines

What we’re seeing isn’t fear, it's strategy. Indian investors are not hoarding gold in panic. They’re making deliberate choices to future-proof their portfolios for a world that’s changing fast. In that world, gold and silver offer something rare: assets that are independent, liquid, and resilient. They don’t rely on perfect policymaking. They don’t get hit by sanctions. And they’ve survived every kind of crisis history has thrown at them.

This isn’t about returning to the past - it’s about being ready for the future.

(The author is Partner and Fund Manager at INVasset, PMS)

[Disclaimer: The opinions, beliefs, and views expressed by the various authors and forum participants on this website are personal and do not reflect the opinions, beliefs, and views of ABP News Network Pvt Ltd.]

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