In India, the act of acquiring gold and silver transcends a mere financial transaction; it’s a deep-rooted tradition. For countless generations, these precious metals have been purchased in the form of coins and ornaments during auspicious periods like Dhanteras and Diwali. These purchases carry immense spiritual significance and are simultaneously regarded as a prudent strategy for long-term wealth accumulation. This ingrained cultural habit has greatly benefited Indian households, serving as a reliable store of value, minimising reliance on borrowing, and acting as a hedge against inflation. Even today, gold and silver are consistently viewed as one of the most secure and dependable investment choices.
The enduring appeal of gold and silver
Gold, in particular, has demonstrated impressive returns over time. Over the last 15 years, it has yielded a remarkable Compound Annual Growth Rate (CAGR) of roughly 14 per cent, cementing its position as a highly rewarding asset. While more prone to fluctuations, silver has also generated favorable long-term returns. Consequently, investing in these metals offers not only financial gains but also adds social value. In many Indian homes, gold is a tangible representation of security, status, and family prestige. It’s estimated that Indian households collectively hold around 25,000 tonnes of gold, predominantly as jewellery, making Indian families some of the world’s largest private holders of the metal.
Despite recent spikes in their market price, the cultural and emotional importance of investing in gold and silver during Dhanteras and Diwali remains profoundly strong. Millions believe that buying gold on these specific days ushers in luck, prosperity, and blessings. This sentiment is universally shared and passed down through the ages.
Contemporary investment methods and the value of physical ownership
While this accumulated gold was traditionally held for personal use and emotional comfort, its financial value is enormous. With the modernisation of the economy, this reserve can be integrated into the formal financial system to boost liquidity, primarily through digital platforms and gold loan schemes. However, the unique charm and cultural value of owning physical gold remains unparalleled.
For individuals who treat gold and silver purely as investment instruments rather than for personal adornment, newer avenues like Gold and Silver Exchange-Traded Funds (ETFs) exist. These modern options allow people to invest in the metals’ value without the need for physical possession. Investors can begin with small amounts, purchase via mobile applications, and even establish Systematic Investment Plans (SIPs). Although convenient and cost-effective, this approach inherently lacks the emotional, cultural, and tangible satisfaction that comes with owning the actual precious metal.
Ultimately, the traditional practice retains its profound worth. As many experts would agree, “Investing in physical gold and silver in any form is always the best.” Whether the motive is wealth creation, religious worship, or preparation for weddings, acquiring physical gold and silver continues to be a judicious choice for families across India.
The author is Chairman & Joint Managing Director, Khazanchi Jewellers Limited
Published on October 18, 2025