Mumbai, Nov. 4 -- The price of 24-karat gold in India peaked in January 2026. On January 29, it hit Rs.17,880 per gram. Nine months later, on October 28, it was down 24% to Rs.14,395 per gram-which means Rs.1 lakh invested in gold at the end of January 2026 would be worth roughly Rs.76,000 now. With Diwali and Dhanteras around the corner, the mood on the street is to buy while the price is down. But what if prices fell further? Would the demand hold up or switch to a wait and watch mode? What happens if prices were to rise from here after a 10 month correction amid global capital market volatility? While price seems like the focal point, the question for individual investors isn't really how much cheaper it is or can be, but on how much to own and in which form - coins, jewellery, digital, through funds or ETFs. Gold went up 110% from the start of 2024 till end of 2025 -meaning if you held gold in this period, your return would have doubled. While its 10-year annualised return is around 17%-18%-indicating that it may be a good asset for long-term wealth creation-this figure is heavily distorted by the exceptional rally in 2025-gold prices were up 75% in just that one year. Historically, gold is not an asset used to build long term wealth. Its role is more to protect your portfolio in times of crisis, uncertainty and when the rupee weakens or inflation rises. When sentiment is positive, it's easy to overlook risks and the nature of the asset itself. Consider this-gold prices moved more or less sideways for most of the years from 2012 to 2019 and then again from 2021 to 2023, with modest gains in the periods in between. Unlike other long term growth assets, gold has no income to offer investors-no interest, dividends or rental income. Basically the price does not back any real value creation. Most planners have historically considered a 5%-10% portfolio allocation adequate for long term portfolios. Plus, a lot of the gold in Indian households is jewellery. This exposure is mostly ornamental but it can be monetised through gold loans. Many are already taking advantage of higher gold prices, which can be seen in the growth of loans against gold jewellery-this portfolio for banks grew 83% in August 2026 as compared to a year ago and for NBFCs it grew 69% as compared to a year ago (RBI data). According to Khyati Mashru Vasani, CWM, AAFM, founder and chief financial coach, PlantRich Consultancy LLP, "We recommend some allocation to gold in each of our clients' portfolios. However, we prefer keeping the investment separate from their jewellery. How much they invest depends largely on their risk appetite: while for conservative clients we may go up to 20% allocation, for aggressive clients who are okay with risk in their portfolio, we stick to 10% allocation." Even though gold jewellery can be monetised, you must be careful if you are including it as part of your overall gold investment. Firstly, there is emotion attached to jewellery which can mean that you may never part with it regardless of the rise in gold price. Secondly, the value you get from the sale will depend on the net weight of gold-build expectations accordingly. Through the rally, as gold price went up, so did demand. This is clearly visible in inflows of gold ETFs throughout 2025. Domestic investor net flows into gold ETFs increased from around Rs.3,750 crore in January 2025 to Rs.24,040 in January 2026 when prices peaked. Net inflows for September 2026 are already back down to Rs.4,450 crore. This shows a pattern of chasing yesterday's returns, which can backfire. Should one continue buying, now that prices have corrected? Despite the correction, prices are still above the 2025 average. It's impossible to predict which way prices will lean going forward. The most prudent way to buy is to stagger your purchases rather than following the herd and that too only up to the identified allocation. Add small amounts at defined, regular intervals-whether in gold funds or bar and coins-instead of buying the asset in a big lump sum. The cheapest way is via gold fund of funds and gold exchange traded funds. They are very easy to transact, hold and there is flexibility and transparency. Fund units are priced to the market price of gold, so you get maximum value per unit. And it is regulated by capital markets regulator SEBI. One caveat is that some gold fund of funds have suspended fresh lump sum subscriptions but SIPs can continue. However, not everyone aligns with this kind of a paper investment in gold, especially during the festive season. "For those who insist on holding physical gold as an investment, we suggest good quality and 99.9% pure bars and coins. Clients understand that these can come at a 2.5%-3% premium over market prices," says Vasani. Include GST and your buy price is already roughly 5%-6% higher than the current gold price. Jewellery is the most emotionally fulfilling way, but making charges can take away 10%-15% of the value. Plus, the jewellery you buy is unlikely to be 24-karat or even 22-karat, which works for ornamental use but shouldn't be considered an investment. "The wedding season has started and the demand continues. Lower gold prices bode well for jewellery buyers, however, the demand is not influenced directly by the price of gold. People have a budget and a ticket size that they want to spend. Usually, one will spend that amount regardless of the market price of gold. Options like 18-karat or 14-karat gold jewellery are being considered, too, where the budget is able to fit in lighter weight gold jewellery. This demand is separate from investment demand," says Colin Shah, MD, Kama Jewelry. Then there is digital gold, which is also seeing higher incremental demand. According to data from World Gold Council, digital gold demand remained firm this September, with purchases rising to Rs.2,590 crore, up 83% as compared to a year earlier, and 4% above the average monthly purchase value recorded over the previous five months. However, SEBI has warned that this route is unregulated and there is no audit or any form of grievance redressal. Sovereign gold bonds were a favoured route to buying gold, but unfortunately there are no new issuances at the moment. You can buy from the secondary market, but that's not a straightforward purchase. You have to be mindful of the market yield, demand and supply of the particular bond you are looking to buy. Lastly, consider ease and time of exit. Ideally, trim your allocation if it goes beyond what you originally targeted or sell if you planned to hold gold for a particular goal such as turning it into jewellery for marriage. Vasani says, "Unlike with equity investments, clients are not panicking about the fall in gold prices despite seeing portfolio values in red. There is no rush to sell." Bottom line, buy a coin or a token jewellery for tradition in the festive season, but invest through funds or ETFs to hedge against volatility, and stick to your allocation....