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While prices have seen some correction due to a stronger dollar and profit booking, investor interest in gold-backed instruments remains robust.
This week, gold has recovered nearly 10% to Rs 1,42,500 per 10 grams on Friday, compared with Rs 1,30,000 on Monday.
Amid rising geopolitical tensions and volatility in equity markets, gold has once again come into focus as a safe-haven asset. While prices have seen some correction due to a stronger dollar and profit booking, investor interest in gold-backed instruments remains robust. A key question many retail investors are asking now is: Can you invest in gold through a systematic investment plan (SIP)?
The answer is yes. Investors can gain exposure to gold through gold mutual funds, and importantly, they can invest in these funds via SIP, just like equity mutual funds.
What Are Gold Mutual Funds?
Gold mutual funds are fund-of-funds that primarily invest in gold exchange-traded funds (ETFs), which in turn track domestic gold prices. This structure allows investors to participate in gold without the need to physically buy or store the metal.
Unlike direct ETF investments, which require a demat account, gold mutual funds can be accessed easily through SIPs, making them more convenient for retail investors.
SIP in Gold Funds: How It Works
A SIP allows investors to put a fixed amount at regular intervals, monthly or quarterly, into a gold mutual fund. This approach helps in averaging out purchase costs, especially in a volatile asset like gold.
For instance, instead of investing a lump sum when prices are high, SIPs spread the investment across cycles, reducing timing risk. This is particularly relevant now, as gold prices have seen both sharp rallies and corrections in recent months.
Why Investors Are Turning to Gold SIPs
Gold has historically shown low correlation with equities, making it a useful diversification tool. During periods of market stress, such as wars or economic slowdowns, gold tends to outperform or at least hold value better than risk assets.
However, the current phase is slightly different. Both equities and gold have corrected simultaneously due to global factors like a strong US dollar and liquidity tightening. Despite this, long-term investors are continuing to allocate to gold through SIPs, betting on its role as a hedge.
Top Gold Mutual Fund Schemes and Returns
Several gold mutual funds have delivered strong returns over the past year, even before the recent geopolitical tensions intensified.
- Nippon India Gold Savings Fund: Around 62% (1-year return), despite recent correction.
- Nippon India Gold ETF BeES: 60.19%
Funds from Axis Mutual Fund, ICICI Prudential Mutual Fund, HDFC Mutual Fund, and Tata Mutual Fund have also posted robust gains
These returns were largely driven by the sharp rally in global gold prices in 2025, aided by inflation concerns and central bank buying. However, recent corrections have led to some moderation, and even profit booking, reflected in marginal month-on-month AUM declines in February.
This week, gold has recovered nearly 10% to Rs 1,42,500 per 10 grams on Friday, compared with Rs 1,30,000 on Monday.
Should You Invest in Gold via SIP?
Investing in gold through SIPs can be a prudent strategy for long-term portfolio diversification. It helps reduce volatility, provides a hedge against inflation and geopolitical risks, and avoids the challenges of physical gold ownership.
That said, gold does not generate income like equities or bonds. Its returns are largely price-driven, which can be cyclical.
Disclaimer:Disclaimer: The views and investment tips shared in this article are for general information purposes only. Readers are advised to consult a certified financial advisor before making any investment decisions.
March 27, 2026, 11:23 IST
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