Gold Sitting Idle in Lockers? Why Experts Want Indians to Monetise Their Yellow Metal Now
Gold prices are hitting new highs. India is trying to reduce its import bill. In this environment, financial experts are urging investors to rethink how they hold the yellow metal. The message is clear: do not let your gold sit idle in lockers. Instead, consider monetising it and moving towards more diversified financial assets.
For generations, Indian families have bought gold for weddings, festivals, and as a store of value. It is estimated that Indian households hold over 25,000 tonnes of gold. Most of this gold is locked away in bank lockers or home safes. It earns no interest. It does not generate any income. It simply sits there, waiting for a future sale.
Why the Push to Monetise Gold Now?
The current rally in gold prices has made the metal very attractive to sell. Global uncertainties and central bank buying have pushed prices to record levels. For many investors, this is a good time to book profits. But experts say the bigger reason is strategic. India imports most of its gold. High imports put pressure on the country’s current account deficit. When Indians monetise their existing gold, they reduce the need for fresh imports. This helps the national economy.
Financial advisors also point out that gold alone is not enough for long-term wealth creation. While gold acts as a hedge against inflation and economic turmoil, it does not offer compounding returns like equities or mutual funds. Over a 10- or 20-year period, a balanced portfolio with stocks, bonds, and gold has historically performed better than a portfolio heavy on gold.
What Does Monetising Gold Mean?
Monetising gold means turning your physical gold into cash or financial instruments. There are several ways to do this. You can sell old jewellery to a jeweller or a bullion dealer. You can also use the Gold Monetisation Scheme offered by Indian banks. Under this scheme, you deposit your gold with a bank. The bank pays you interest on the deposit. At the end of the term, you get back the gold or its cash equivalent. Another option is to invest in gold ETFs or sovereign gold bonds. These are paper-based gold investments that offer liquidity and returns without the hassle of storage.
Example of a Smarter Approach
Consider a family that has 500 grams of gold sitting in a locker. At current prices, that gold is worth around ₹30 lakh. If they simply hold it, they earn nothing. If they sell half of it and invest the proceeds in a diversified mutual fund or a fixed deposit, they can earn an annual return of 8 to 12 percent. Over ten years, that money could grow significantly. Meanwhile, they still keep 250 grams of gold as a safety net. This balanced approach reduces risk and improves overall returns.
What Experts Recommend
Financial experts suggest that gold should form no more than 10 to 15 percent of an individual’s total investment portfolio. For most Indian families, the actual allocation is much higher. Advisors recommend gradually reducing physical gold holdings and shifting towards financial assets. They also stress the importance of strategic investing. Instead of buying gold impulsively during festivals, investors should treat it as a tactical asset. Buy when prices are low, sell when they are high, and reinvest the profits into growth-oriented assets.
The bottom line is simple. Gold is a valuable asset, but it should not be a dead asset. By monetising idle gold and building a balanced portfolio, Indian investors can create more wealth over the long term. As gold prices remain elevated, now may be the perfect time to take action.
