When the world turned upside down in 2020 with the advent of Covid, so did the markets. Stocks tumbled, economies froze, and uncertainty became the new normal. Yet amid all the chaos, one asset gleamed brighter than ever--gold.
Ramesh, an IT professional based in Dubai, had seen both sides of the story. In 2012, he bought a few gold coins after hearing analysts predict a rally. But soon, the excitement faded.
For the next six years, gold hardly moved — hovering between ₹25,000 and ₹32,000 per 10 grams. By 2018, Ramesh had lost faith. “I should have put this money in mutual funds,” he complained to his wife.
Then came 2020 — the pandemic, the lockdowns, and the market crash. Suddenly, the same yellow metal that had sat quietly for years turned into a star performer. Within months, gold shot past ₹55,000 per 10 grams, rewarding those who held it patiently. Ramesh looked at his earlier purchase and smiled, “Maybe gold isn’t so boring after all.”
Between 2012 and 2019, gold went through one of its quietest phases. The world economy was stable, equity markets were booming, and investors were chasing higher returns elsewhere. Gold’s “underperformance” wasn’t a failure — it was simply doing what it always does: waiting patiently while riskier assets had their moment in the sun.
Many investors exited gold during this phase, believing it had lost its shine. But history has always shown that gold performs best when uncertainty returns — whether due to inflation, war, or market volatility.
Then came COVID-19 — a black swan event that redefined market behaviour. Equity markets crashed, oil turned negative, and fear dominated every investment conversation.
In that chaos, gold became the safe harbour. Central banks worldwide printed trillions to revive economies, pushing inflation higher. As currencies weakened, gold’s intrinsic value strengthened.
By 2024, gold had nearly doubled from its 2018 lows, outperforming most asset classes on a risk-adjusted basis. It reminded investors of one timeless truth: gold doesn’t shine every day, but when it does, it outshines everything else.
Not necessarily. The problem with investors is timing — buying gold when everyone is talking about it and selling when no one cares. Gold is not meant to be chased; it is meant to be allocated.
Just like a balanced meal needs all nutrients, a balanced portfolio needs all asset classes equities for growth, debt for stability, and gold for protection in uncertain times. Gold acts as a hedge against uncertainty, offering diversification and reducing volatility. Historically, when equities fall sharply, gold tends to rise or remain stable, cushioning the blow to your overall wealth.
Most experts agree on a 10% allocation to gold within your investment portfolio. You can achieve this through:
• Sovereign Gold Bonds (SGBs) – offering 2.5% annual interest plus capital appreciation.
• Gold ETFs or mutual funds – easy liquidity and transparent pricing.
• Digital gold – convenient but best for small-scale investors.
This allocation adds a stabilizing layer to your portfolio, ensuring you benefit when markets swing wildly.
Gold is not a get-rich-quick asset; it’s the guardian of wealth. Its purpose is not to dazzle with gains but to protect long-term prosperity. Ramesh learned this the right way — by holding, not chasing. He now invests systematically, ensuring gold remains around 10% of his diversified portfolio. Because true wealth isn’t about chasing what shines the brightest today. It’s about holding what stands strong through every storm.
(The author, Sibin Paul, a former banker, is the founder & CEO of Wealth Matrix (www.wealthmatrix.in). Mobile: 99944 60022).
