Gold, Silver & Commodities: The Complete Guide Dhan Maitri

Q: Q.1. Is silver a good substitute for gold in a portfolio?

Ans : Not a direct substitute — silver's industrial demand makes it more volatile and less of a pure "safe haven" than gold. Most planners treat silver as a smaller, satellite allocation alongside gold rather than a replacement for it.

Q: Q.2. Can I still buy Sovereign Gold Bonds?

Ans : Only on the secondary market through a stock exchange — no new tranches have been issued since February 2024, and Budget 2026 removed the tax-free-at-maturity benefit for anyone who didn't buy in the original subscription window.

Q: Q.3. Do I need a Demat account to invest in gold or silver?

Ans : Only for ETFs, or if you're buying SGBs on the exchange. Physical gold/silver, digital gold/silver, and gold or silver mutual funds don't require one.

Q: Q.4. How are gains from gold and silver investments taxed in India?

Ans : Physical gold, digital gold, and gold/silver ETFs held for more than 24 months are treated as long-term capital gains and taxed accordingly; shorter holding periods are taxed as short-term gains at your income slab rate. SGBs held to full maturity by the original subscriber remain tax-free on capital gains — this is the one major exception.

Q: Q.5. What's the easiest way to start if I only have a small amount to invest?

Ans : Digital gold or digital silver are the lowest-barrier options — many platforms let you start with as little as ₹1, with no Demat account needed. If you're planning to invest regularly, a gold or silver mutual fund SIP is a more disciplined way to build a position over time.

Gold has been India’s default store of value for generations — but it’s no longer the only precious asset worth understanding, and the way Indians hold gold itself has changed. This guide brings together everything you need to know about gold, silver, and commodities as an asset class — what to buy, what to avoid, and how much of your portfolio should go here.

What This Guide Covers

The 5 ways to invest in gold today — and which ones actually make sense
What changed with Sovereign Gold Bonds (SGBs) in 2026
Gold vs stocks — an honest, numbers-based comparison
Silver as an investment — how it’s different from gold
How much of your portfolio should actually be in precious metals

Start Here: How to Actually Buy Gold

Jewellery is the option most Indian households default to — and the one that costs you the most. Making charges of 15–25% mean you lose a chunk of your money the moment you walk out of the shop. If you’re investing rather than buying for a wedding or family occasion, there are better routes: digital gold, gold ETFs, gold mutual funds, and — if you already hold them — Sovereign Gold Bonds bought on the secondary market.

We’ve broken down all five options, their costs, and their liquidity in detail here: Gold Investment Options in India: 5 Ways to Invest Beyond Jewellery.

One important update: Sovereign Gold Bonds haven’t been issued as new tranches since February 2024, and none are planned for FY 2026–27. You can still buy existing SGBs on the stock exchange, but Budget 2026 changed the rules — the tax-free-at-maturity benefit now applies only to original subscribers who hold for the full 8-year term, not to anyone buying on the secondary market. See the RBI’s official Sovereign Gold Bond FAQ page for full details.

Gold vs Stocks: Which Should You Actually Prioritise?

Every Indian household has this debate at some point. Gold feels safe and familiar; stocks have historically built more wealth. The honest answer is that this isn’t an either/or choice — the two assets do different jobs in a portfolio. We’ve laid out the actual 20-year numbers, when gold makes sense, and a simple allocation framework here: Gold vs Stocks: Where Should Indians Invest?

Silver: The Other Precious Metal

Silver has quietly become a mainstream Indian investment option in recent years, but it behaves quite differently from gold — and it’s worth understanding before you treat it as “gold’s cheaper cousin.”

Why silver is different from gold: Gold is held almost entirely as a store of value and for jewellery — very little of it is consumed industrially. Silver, on the other hand, has significant industrial demand (electronics, solar panels, electrical contacts), which means its price is driven by a mix of investment demand and manufacturing demand. This also makes silver historically more volatile than gold, with sharper price swings in both directions.

How to invest in silver in India:

Physical silver (coins/bars): Available from jewellers and banks, but carries the same storage and purity concerns as physical gold — and silver takes up much more physical space per rupee invested.
Silver ETFs: SEBI cleared the regulatory framework for silver ETFs a few years ago, and several fund houses now offer them. Like gold ETFs, they track the domestic silver price and trade on the stock exchange, requiring a Demat account.
Silver mutual funds (Fund of Funds): These invest in silver ETFs on your behalf and can be bought via SIP without needing a Demat account — the same convenience gold mutual funds offer.
Digital silver: Some of the same apps offering digital gold also offer digital silver in small denominations, backed by physical silver held by the provider.

Unlike gold, there is no Sovereign Silver Bond — SGBs are a gold-specific instrument, so silver investors are limited to ETFs, mutual funds, digital silver, or physical holdings.

We’re working on a full deep-dive on silver investing — including historical returns and a proper gold-vs-silver comparison. Check back soon, or use the calculator below to see how any silver holdings fit into your overall portfolio today.

How Much Should You Actually Hold in Precious Metals?

Most financial planners suggest keeping gold and silver combined to roughly 10–15% of your total portfolio — treated as a hedge against inflation and currency depreciation, not as your primary wealth-building asset. That role belongs to equity over the long term. Precious metals earn their place because they tend to move somewhat independently of stock markets, which smooths out your overall portfolio during downturns.

See Where Gold Fits in Your Full Portfolio

Before adding to your gold or silver holdings, use our free Net Worth Calculator to map your complete asset mix and check whether your precious metals allocation actually matches your goals.

FAQ’s:

Q.1. Is silver a good substitute for gold in a portfolio?

Ans : Not a direct substitute — silver’s industrial demand makes it more volatile and less of a pure “safe haven” than gold. Most planners treat silver as a smaller, satellite allocation alongside gold rather than a replacement for it.

Q.2. Can I still buy Sovereign Gold Bonds?

Ans : Only on the secondary market through a stock exchange — no new tranches have been issued since February 2024, and Budget 2026 removed the tax-free-at-maturity benefit for anyone who didn’t buy in the original subscription window.

Q.3. Do I need a Demat account to invest in gold or silver?

Ans : Only for ETFs, or if you’re buying SGBs on the exchange. Physical gold/silver, digital gold/silver, and gold or silver mutual funds don’t require one.

Q.4. How are gains from gold and silver investments taxed in India?

Ans : Physical gold, digital gold, and gold/silver ETFs held for more than 24 months are treated as long-term capital gains and taxed accordingly; shorter holding periods are taxed as short-term gains at your income slab rate. SGBs held to full maturity by the original subscriber remain tax-free on capital gains — this is the one major exception.

Q.5. What’s the easiest way to start if I only have a small amount to invest?

Ans : Digital gold or digital silver are the lowest-barrier options — many platforms let you start with as little as ₹1, with no Demat account needed. If you’re planning to invest regularly, a gold or silver mutual fund SIP is a more disciplined way to build a position over time.

Gold, Silver & Commodities: The Complete Guide