Gold’s glittering rally: 6 ways for retail investors to participate in the rally this Diwali after 51% YTD surge
In this backdrop, leading market analysts caution investors against chasing the rally blindly and urge them to explore a wider basket of instruments that allow participation without burning a hole in the pocket.
Gold’s performance in 2025 has been underpinned by a convergence of macroeconomic and geopolitical drivers—chief among them being US rate cut expectations, a weaker dollar, record central bank buying, and global tensions.
According to Renisha Chainani, Head of Research at Augmont, “Gold prices have already surged over 50% year-to-date, and the momentum is likely to stay firm through the festive season… On the MCX, gold could touch around Rs 1,20,000–Rs 1,22,000 per 10 grams by Diwali… and possibly extend towards Rs 1,25,000–Rs 1,28,000 by year-end.”
Ross Maxwell, Global Strategy Lead at VT Markets, attributes the rally to “a weaker USD, expectations of lower interest rates, strong central bank demand, and geopolitical uncertainty.”
However, he warns that “sustaining the current momentum will be tricky, especially as we could see some profit taking around the key psychological level at $4,000/oz.”
How can investors still participate in gold’s rally?
With physical gold becoming prohibitively expensive, retail investors still have a range of modern and cost-effective alternatives that provide exposure to gold without the burden of storage or high capital outlay. Here are the options discussed by the analysts:
1. Gold ETFs
Gold Exchange-Traded Funds offer liquidity, transparency, and the convenience of trading like a stock. Chainani points out they “offer liquidity, transparency, and ease of trading.” Ross Maxwell also highlights ETFs like SPDR GLD, saying they “provide good strong liquidity and low costs.”
2. Digital gold
Ideal for micro-investors, digital gold allows one to buy even a fraction of a gram. It provides 24K purity and insured storage, as per Chainani. These platforms are particularly suited for systematic investing.
3. Gold mutual funds
For those preferring managed exposure, mutual funds investing in gold assets are a viable option. These are suitable for investors without a demat account and offer the benefit of professional fund management.
Also read: Why Goldman Sachs sees more upside in gold as it raises target to $4,900 by 2026?
4. Physical gold – coins and bars
Still popular for traditional reasons, Chainani acknowledges that “physical gold coins or bars are preferred by festive purchasers for auspicious and emotional reasons.” Retail investors can buy these from trusted dealers online or offline.
5. Futures and options
For experienced investors, gold futures and options provide leveraged exposure. Ross Maxwell suggests, “More experienced investors can explore futures, options, or CFDs for leveraged exposure.
6. Gold mining stocks
Investors looking for higher but riskier returns may consider gold mining companies. Ross Maxwell notes these “could also be used for potentially higher but riskier returns.
Diwali outlook: What lies ahead for gold prices?
While analysts agree that gold’s fundamentals remain strong, there is also consensus around the need for a cautious approach.
Jashan Arora, Director at Master Trust Group, believes the rally is rooted in “aggressive gold accumulation by central banks worldwide… supported by expectations of potential interest rate cuts and persistent geopolitical uncertainty.”
He sees continued momentum through the festive season and into the final months of the year.
Ross Maxwell tempers optimism with a note of caution, saying “the price could continue higher if the FED commentary turns dovish or geopolitical risks intensify. However, a stronger USD or higher real yields could trigger short-term pullbacks of 5–10%.”
In her closing advice, Chainani suggests, “investors should adopt a staggered approach instead of chasing prices at record highs. Accumulating corrections or through systematic investment options helps average out the cost.”
As India celebrates the Festival of Lights, investors are reminded that gold, while auspicious and lucrative, must be approached with strategy and discipline. Sensible allocation, diversification across instruments, and dollar-cost averaging can help investors capture the upside while shielding themselves from volatility.
To quote Ross Maxwell: “Disciplined position sizing and awareness of volatility are essential to capture gains while managing risks.”
Also read: Gold shatters all records, tops Rs 1.22 lakh/10 gm. Should you buy more or book profit?
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)