Introduction

For centuries, gold has been seen as a safe-haven asset and a reliable store of value. Whether during inflation, market crashes, or global uncertainty, gold has always held its ground. In the last few years, gold has not only protected investors but also delivered impressive returns.

In this blog, we’ll explore the returns from gold investments, why gold prices have risen, and the key things every investor should know before investing in gold.

Gold Returns in the Last Few Years

Global Perspective 

• 2020 (Pandemic year): Gold surged by ~25%, hitting record highs near ₹183726.35/oz as investors flocked to safe assets.
  
  

• 2021: Consolidation year — gold dipped around -4%, pressured by rising bond yields and stronger USD.
  
  

• 2022: Despite volatility, gold ended nearly flat to +1%, as inflation and geopolitical tensions balanced out rate hikes.
  
  

• 2023: Gold rebounded with +13% returns, supported by central bank buying and inflationary fears.
  
  

• 2024: Continued to perform well, reaching new highs above ₹213002.41/oz, giving ~15–18% returns YoY.
  
  

• 2025 (so far): Gold is trading above ₹230,746.49/oz, delivering ~20%+ returns year-to-date, making it one of the best performing assets.
  
  

Indian Perspective 

Due to rupee depreciation against the dollar, Indian investors have enjoyed even higher returns:

• Last 5 years CAGR (2019–2024): ~12–14% annualized returns.
  
  

• Gold prices in India rose from around ₹35,000 per 10g in 2019 to ₹65,000+ per 10g in 2024–25.
  
  

• This makes gold one of the most consistent wealth-protecting assets for Indian households.
  
  

Why Has Gold Delivered Strong Returns?

1. Inflation Hedge – Gold prices rise when inflation erodes currency value.
   
   

2. Global Uncertainty – Geopolitical tensions, wars, and economic instability push investors toward gold.
   
   

3. Central Bank Buying – Countries like China, India, and Turkey have been aggressively buying gold reserves.
   
   

4. Weakening Dollar Trend – A softer USD boosts demand for gold in global markets.
   
   

5. Limited Supply – Gold mining growth is slow, keeping supply tight against rising demand.
   
   

Things You Need to Know Before Investing in Gold

1. Forms of Gold Investment
   
   

• Physical Gold: Coins, bars, jewellery (emotional value but higher making charges).
  
  

• Digital Gold: Fractional gold online (convenient but storage fees apply).
  
  

• Sovereign Gold Bonds (SGBs): Backed by RBI, offering 2.5% interest + capital appreciation.
  
  

• Gold ETFs / Mutual Funds: Trade like stocks, highly liquid, no storage hassles.
  
  

2. Volatility in the Short Term
   
   

• While gold is stable long-term, it can be volatile in short periods due to currency fluctuations and global news.
  
  

3. Gold is a Hedge, Not a Growth Asset
   
   

• Unlike equities, gold doesn’t generate cash flow or dividends. It protects wealth but doesn’t “grow” businesses.
  
  

4. Ideal Allocation in Portfolio
   
   

• Experts recommend 10–15% of portfolio in gold to hedge risks and balance volatility.
  
  

5. Taxation
   
   

• Physical gold and ETFs attract capital gains tax if sold after 3 years (long-term).
  
  

• SGBs are tax-free if held till maturity (8 years).
  
  

Conclusion

Gold has proven its value as a wealth preserver and consistent performer in the last few years. With double-digit returns in India and strong gains globally, gold continues to shine as a must-have asset in every portfolio.

For investors, the key is to choose the right form of gold investment (SGBs, ETFs, or physical) based on goals, stay invested long-term, and treat gold as insurance against uncertainty rather than a get-rich-quick option.