Gold prices hit the roof: Should investors ditch mutual funds for yellow metal? Explained
Gold prices have hit ₹1.30 lakh per 10 grams on Monday, delivering massive returns to the investors of the yellow metal. Likewise, silver prices have also risen significantly in 2025. With safe-haven assets giving exceptional returns to investors, why should retail investors opt for growth assets such as equity mutual funds?
Let us look at this phenomenon in detail here. First of all, let us understand why precious metal prices are rising.
Why are gold prices rising?
Gold prices have risen by over 70% in 2025 on increased global political and economic uncertainties amid strong central bank buying, US Fed rate cut hopes, and robust inflows in exchange-traded funds (ETFs).
Is the price jump temporary?
Just like stock prices, no one can predict gold prices. However, gold prices are typically a reflection of uncertainty in global markets. However, experts recommend waiting for a correction in gold prices before buying the yellow metal.
“One should wait for the gold prices to normalise. After a rally of over 85% in silver and 70% in gold, ₹1,18,000- ₹1,20,000 is a good level to buy in gold and ₹1,40,000 in silver,” said Vandana Bharti, the head of commodities research at SMC Global.
Why should you opt for mutual funds?
Mutual funds, particularly equity funds, give exposure to securities and are considered a good investment in the long term. Although barely any stock can give a 70% return in one year, equities are known for delivering consistent returns over a long period of time.
Additionally, mutual funds enable investors to invest in a range of assets such as stocks across market cap (large, mid and small cap), corporate debt, government bonds and gold.
Can you invest in gold via mutual funds?
Yes, as mentioned above, one can invest in gold via mutual funds as well. There are gold ETFs (exchange-traded funds) that one can buy to get exposure to gold. These funds can be traded in the stock markets as well.
Some gold funds include Invesco India Gold ETF Fund of Fund, Kotak Gold Fund, LIC MF Gold ETF FOF, Mirae Asset Gold ETF FOF and Nippon India Gold Savings Fund.
Is it advisable to choose different asset classes?
Yes, certainly. The key to healthy and long-term investing is the right asset allocation. The ideal portfolio contains different assets such as equities, debt, gold and cash in an optimum ratio.
In view of the rise and fall in the prices of different assets, the portfolio as a whole grows when it constitutes asset classes across the spectrum – from gold to large-cap stocks and fixed deposits to small caps.
For all personal finance updates, visit here