Best Way to Invest in Gold - 2026

Published on January 08, 2026 | 4 min read

Gold futures, silver prices, gold silver price today

For Indian households, gold has always been more than just an investment. From heirloom jewellery to religious offerings, to being an important aspect of Indian weddings, its relevance and importance have remained unchanged. For us, gold is emotion wrapped around safety, stability and long-term value. And there is a strong underlying economics supporting this asset class.
Gold also offers liquidity and has global acceptance. These qualities make it a dependable asset rather than a short-term trading instrument. Let’s understand the best ways to invest in gold in 2026, compare available options and explore how gold can fit into your overall investment strategy.

Why Should You Invest in Gold?

For decades, investors have looked up to gold as a hedge against inflation, an asset with stable valuations amidst market volatility and economic uncertainty. Last few years, gold’s returns have also outperformed traditional fixed income instruments like fixed deposits and bonds, thus proving returns with safety. If you are looking for the best way to invest in gold in India, there are multiple investment avenues beyond jewellery and coins. Options such as gold electronic traded funds(ETFs), physical gold and digital gold provide all the benefits and risks of investing in physical gold with different levels of convenience, liquidity and cost efficiency.

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What Are the Different Ways to Invest in Gold?

Today, there are several ways to invest in gold, each catering to different investor needs and preferences.

Physical Gold (jewellery, coins and bars)

Even today, many Indians prefer buying physical gold. Jewellery is often purchased for cultural reasons, weddings, or gifting and coins and bars are purchased on auspicious occasions. However, jewellery involves high making charges and resale deductions, which reduce returns. Coins and bars are easier to sell, but there are still concerns of safe storage. Thus, physical gold is suited for investors who prefer tangible ownership and are comfortable with its handling and storage.

Gold ETFs

With the digitalisation of investments, gold ETFs have emerged as a popular and efficient way to invest in gold. They are traded on stock exchanges and closely align with the price of physical gold. Investors can buy and sell gold ETFs just like shares, making them highly liquid and convenient. Since there is no need for physical storage, gold ETFs eliminate security. Unlike physical gold, when you sell these funds, there are no deductions. Being regulated instruments, gold ETFs are suited for investors looking for ease of access, liquidity minus the storage concerns.

Sovereign Gold Bonds (SGBs) – Current Status

Sovereign Gold Bonds were earlier considered one of the most attractive gold investment options due to government backing, interest income and tax efficiency. However, SGBs are currently discontinued for fresh investments. The government has stopped issuing new tranches, which means new investors cannot subscribe to SGBs at present. Existing investors can continue to hold their bonds until maturity or redeem them as per the original terms. As a result, SGBs no longer feature as an option for first-time gold investors in 2026.

Digital Gold

Digital gold allows investors to buy gold online in very small quantities through apps and platforms. This makes gold accessible even with limited capital, as low as Rs.500. However, digital gold is not regulated like gold ETFs or government securities. Storage arrangements, pricing transparency and redemption rules vary across platforms, which increases risk. While digital gold offers convenience, investors should clearly understand the risks associated with, platform’s terms and conditions before investing.

Which Is the Best Way to Invest in Gold in India?

There is no single best way to invest in gold for everyone. The right option depends on you’re your familiarity and handling of the instrument. For investors focused on long-term wealth preservation and regulatory safety, gold ETFs are often the preferred choice. Those who value physical ownership may continue to invest in gold coins or bars despite the associated costs.

Taxation on Gold Investments in India

Like for any other instrument, taxation plays an important role in determining final returns from gold investments.

Gold Taxation Overview

Gold Form	Short-Term Capital Gain (STCG)	Long-Term Capital Gain (LTCG)
Physical / Digital Gold / Gold Mutual Funds	Taxed at your income tax slab rate (if held for ≤ 24 months)	12.5% flat without indexation (if held for > 24 months)
Gold ETFs (Listed)	Taxed at your income tax slab rate (if held for ≤ 12 months)	12.5% flat without indexation (if held for > 12 months)
Sovereign Gold Bonds (SGBs)	Taxed at your income tax slab rate (if sold on exchange within 12 months)	Exempt if held until maturity (8 years). Otherwise, 12.5% flat without indexation if sold earlier on exchange

Note: Investors should always consider taxation while comparing different gold investment options.

How Much Gold Should You Have in Your Portfolio?

While there is no thumb rule to allocate a certain percent of portfolio to gold, most financial advisors recommend having 5% to 10% of the total portfolio to gold. The gold allocation helps balance the risk associated with equity. It is always recommended to analyse your overall financial goals, liquidity needs and risks associated before investing in any financial instrument.

Risks Involved in Gold Investment

While gold is considered relatively safe, it carries carry risk component. Gold prices usually swing due to changes in interest rates, currency rate fluctuations and geopolitical dynamics. When it comes to physical gold, there are handling and storage concerns. The other form, digital gold, involves platform-related uncertainties.

Is Gold a Good Investment in 2026?

In 2026, gold continues to remain relevant as a defensive asset amid global economic uncertainty. While it may not always outperform equities, gold plays an important role in preserving wealth and reducing portfolio volatility. For investors looking stability and balance, gold remains a sensible addition to any investment portfolio.

Frequently Asked Questions on Gold Investment

 Are Sovereign Gold Bonds available for new investors?

No, Sovereign Gold Bonds are currently discontinued for fresh subscriptions. 2) Is gold ETF better than physical gold? Gold ETFs are generally more cost-efficient, liquid, and easier to manage compared to physical gold. 3) Can I invest small amounts in gold? Yes, gold ETFs and digital gold allow investors to start with small amounts.

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