Here's how to buy gold this Diwali, Dhanteras without hurting your pocket

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Sky high gold prices are pinching pockets of Indian consumers even before the festive and wedding season kicked-off in India. The yellow metal touched an all-time high of ₹1,14,179 per 10 grams on the Multi-Commodity Exchange (MCX) on September 23, 2025, fuelled by geopolitical uncertainties, concerns around tariffs, and buying by global central banks, presents a unique dilemma for investors.

 

While the festive season traditionally sees a rush for gold due to its cultural significance, the current record valuations prompt a crucial question: how should investors strategically approach buying gold this Diwali and Dhanteras to balance tradition with sound investment principles?

How to invest in gold?

Today, investors have multiple avenues to gain exposure to the precious metal:

 

Physical gold - This form of gold can be bought in the form of jewellery, coins, and bars.

 

Gold Exchange Traded Funds (ETFs) –  A gold ETF is a financial instrument that allows investors to invest in gold without holding physical gold. It is traded on the stock exchange just like shares and reflects the real-time market price of gold.

 

Sovereign Gold Bonds (SGBs) – SGB is government security that serves as an alternative to physical gold, denominated in grams of gold and issued by the Reserve Bank of India (RBI) on behalf of the Government of India. SGBs are issued by the Government of India, providing a low-risk investment option with no chance of default.

 

Gold Mutual Funds – Gold funds are a type of mutual funds that directly or indirectly invest in gold reserves.

How to buy gold this festive season? Analysts weigh

Analysts believe buying Gold ETFs on dips and physical gold in small quantities will be ideal for investors this festive season, as gold is expected to stay firm in the short-term.

 

G Chokkalingam, founder and head of equity research, Equinomics Research, suggests buying gold ETFs on dips this festive season as it provides better margin of safety and has less competition.

 

"Since festivals like Diwali/ Dhanteras are considered auspicious, people generally buy gold and bring goddess Lakshmi home. However, at current levels, we would suggest investors to buy a small quantity in the physical market and put the rest in gold derivatives like ETFs, or even look at buying precious metals in a staggered manner at corrective levels," said Pranav Mer, vice president, EBG commodity & currency research, JM Financial Services.

 

"We don't advise buying in a physical or bulk quantity at current price levels, as prices are due for a correction in the near term," he added.

 

So far in calendar year 2025, gold prices have seen a dramatic rise of 51 per cent. According to Praveen Singh, head currencies and commodities, Mirae Asset Sharekhan, gold is expected to test the key $3800 (₹1,14,600) resistance in the coming months as long-term target is $4000 (₹1,20,000). Support is at $3700 (₹1,11,500)/$3675 (₹1,10,800)/$3600 (₹ 1,08,500).

How much gold should you allocate in your portfolio?

Analysts believe that the ideal allocation to gold and silver combined should be in the range of 5–10 per cent of an investor's portfolio  to diversify risk, hedge against inflation, and have a safe haven cushion during market volatility.

 

The exact proportion depends on an individual's:

• Investment horizon – longer horizons allow more flexibility.
• Stage in life – Younger investors may prefer a lower allocation, retirees may prefer slightly higher for safety.
• Risk appetite – Conservative investors may lean closer to 10 per cent, while aggressive investors may be comfortable with 5 per cent.

“By and large, investors should allocate 5–10 per cent of their portfolio to gold and silver combined. The exact allocation depends on their investment horizon, life stage, and risk appetite," said Bathini.