Gold reached a new record high on 1 October 2025. The price of 10 grams of 24-carat gold in Delhi has crossed the ₹1.20 lakh mark. Currently, it is valued at ₹1,20,625. Over the last 12 months, gold prices have rallied by over 52.21%.

This ongoing rally has lured investors across the country, but it is still crucial for them not to lose sight of the fundamentals in this euphoria and keep their return expectations from the yellow metal and silver in check.

Here are five common investment mistakes that investors should avoid to maintain a pleasant experience with their gold and silver investments.

5 mistakes to avoid with your gold and silver investments

1. Avoid paying excessive premiums due to dealer markups or collectability charges. Don’t get carried away in the ongoing bull run of gold and silver. Wealth can only be made in the long run if sensible investments are made and proper rules of gold and silver investing are followed.
2. Consider not overlooking liquidity, as large bars and jewellery often fetch weaker and more complicated resale prices than more easily tradable gold and silver assets, such as silver or gold ETFs, coins, or smaller bars.
3. Focus on ensuring that the gold or silver you are going to purchase is pure and completely free of any impurity. Verify the proper certifications and background of the organisation from which you are purchasing your gold or silver.
4. Give due diligence on storage security, associated costs and management expenses that eat into actual net returns. It is vital to plan the efficient storage of your physical gold and silver well in advance to ensure proper security and peace of mind.
5. Before going ahead with any purchases related to gold, silver, or associated ETFs, it is essential to draft a long-term investment strategy after proper discussion with a certified investment advisor. It will not be prudent to follow the herd and rush with investments or to try to time the cycle.

Expert advice on gold and silver investments for long-term growth

According to Shaily Gang, Head-Products at Tata Asset Management, “Gold should be treated as a perennial strategic asset, ideally 15% of a diversified portfolio, to hedge against inflation, geopolitical shocks, and currency depreciation.” She further noted, “Silver as a tactical allocation idea of up to 10%, supported by rising industrial demand and supply deficits.”

Gang also points to the gold-silver ratio as a useful guide. This ratio measures how many ounces of silver are needed to buy one ounce of gold. When it climbs above 100, silver is undervalued relative to gold, making it an attractive buy. When it falls below 75, gold looks cheaper than silver, offering a better entry point. This aspect of gold and silver investing must also be given due consideration by aspiring investors.

Choosing the right form of gold and silver

Therefore, to potentially maximise returns, aspiring investors should move ahead with liquid and transparent gold and silver investment options. Options such as silver ETFs, gold ETFs, sovereign gold bonds (when a new trench is launched), or smaller denomination coins can be prudent choices.

You should always purchase hallmarked gold or silver with proper details of inception, purity and a bill so that you can do proper follow-ups later on if needed. Investors who are concerned about security and storage, along with a fear of theft, can consider digital or paper gold that also comes with favourable tax treatment.

Stay disciplined and avoid rushing with any investments

Gold and silver currently hover near historic highs. This is a consequence of the ongoing geopolitical complications and issues, such as the Russia-Ukraine war, Trump’s tariffs, and other similar problems. Chasing such momentum based on a herd mentality can be risky, as the yellow metal has already returned more than 50% in the last year, similar to the returns of Silver ETFs.

In conclusion, as Shaily Gang emphasises, reviewing allocations on a regular basis and balancing gold and silver investments with other asset classes according to your long-term financial plan can enhance the resilience of your portfolio in uncertain times.

Disclaimer: The views and investment tips expressed here are for informational purposes only and do not constitute financial advice. Investors are advised to consult certified professionals before making any investment decisions.