As investors gear up for fiscal year 2026 (FY26), the conversation surrounding portfolio diversification is gaining renewed momentum. In particular, gold is emerging as a focal point in discussions about asset allocation. Traditionally regarded as a safe haven, gold is once again proving its relevance in today’s unpredictable global landscape, characterized by inflationary pressures, geopolitical uncertainties, and currency fluctuations. Experts are increasingly advocating for a measured allocation to gold within investment portfolios, emphasizing its potential to provide stability and protection in turbulent times.
Why Gold Deserves a Spot in Your Portfolio
“Gold is a hedge against inflation, the US dollar, and uncertainty,” asserts Kunal Vora, Partner at White Whale Partners. He emphasizes that the current climate of economic instability makes the case for gold particularly compelling. Unlike traditional financial assets, gold does not generate cash flows or dividends; its value lies in its unique ability to offset risks that other investments may not effectively hedge.
In times of policy volatility, global tensions, and economic ambiguity, gold tends to shine—both literally and metaphorically. Vora notes, “Gold has had a strong run recently, especially in the lead-up to policy moves and geopolitical uncertainty surrounding President Trump’s announcements. However, once these fears subside, so will the price of gold. It’s important to view it as a dynamic hedge rather than a permanent outperformer.” This perspective encourages investors to consider gold not as a guaranteed profit-maker but as a strategic tool for risk management.
A Sensible Allocation Strategy for FY26
For those looking to build long-term wealth, balance is key. Achin Goel, Vice President at Bonanza, suggests a strategic investment mix for individuals in the 30–40 age group: 70% equities, 20% debt, and 10% gold. “This allocation allows you to take advantage of growth from equities while maintaining stability through debt, and risk protection with gold,” explains Goel. “Especially in volatile years like this one, having 10% in gold adds an important cushion to your portfolio.”
This framework is practical for investors who want to remain aggressive while also being mindful of macroeconomic shifts. By incorporating gold into their portfolios, investors can better navigate the complexities of the financial landscape.
What the Technicals Say: Gold’s Momentum Is Strong
From a technical standpoint, gold continues to capture attention. Jateen Trivedi, VP Research Analyst – Commodity and Currency at LKP Securities, highlights that gold prices have recently reached lifetime highs near ₹93,500 on the Multi Commodity Exchange (MCX), gaining ₹1,500 in a short period. “Despite rupee strength, the ongoing geopolitical tensions and US-China tariff battles have fueled a surge in safe-haven demand,” Trivedi explains.
He notes that bullish sentiment is dominating the market, with the next resistance level seen at ₹94,500–₹95,000, while ₹92,000 serves as a strong support level. Investor positioning and upcoming global economic data releases are likely to influence gold’s short-term direction, but the broader trend remains favorable for now.
What Should Investors Do?
As FY26 begins, the investing environment is rife with uncertainties—central bank decisions, global elections, inflation, and war-related tensions all contribute to a complex landscape. In such a setting, a 10% gold allocation offers more than just diversification; it provides resilience.
Investors should focus on preparing for volatility rather than chasing returns. Gold’s historical performance as a safe haven asset suggests that it can serve as a stabilizing force in a diversified portfolio. As the global economic landscape continues to evolve, maintaining a strategic allocation to gold may prove to be a prudent decision.
In conclusion, as investors plan their allocations for FY26, the conversation around portfolio diversification—especially regarding gold—remains crucial. By understanding the role of gold in mitigating risk and providing stability, investors can better position themselves to navigate the uncertainties that lie ahead.
(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own and do not represent the views of the Economic Times.)
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