A study by Kotak Neo shows that consistent annual purchases of gold and silver during Dhanteras since 2005 have yielded nearly 4x returns. The data highlights how long-term discipline can build wealth without the need for active market timing.
A long-term analysis of precious metals conducted by Kotak Neo offers a clear look at how disciplined, consistent investing can affect portfolio value over two decades. By reviewing data from 2005 to 2025, the study tracks the impact of buying gold and silver every year during the Dhanteras festival, a period traditionally associated with metal purchases in India.
The findings show that consistency acts as a counterbalance to price volatility. For gold, an investor who purchased one gram annually over 21 years would have invested a total of ₹76,246. Based on market data, this accumulated holding reached a value of ₹3,02,400 by November 2026. This reflects a nearly fourfold increase in capital, providing a steady return for those who ignored short-term price swings.
Silver has followed a similar path of wealth creation. An investor who purchased 100 grams of silver annually during the same 21-year window would have accumulated 2.1 kilograms. With a total investment cost of ₹1,05,329, the portfolio’s value rose to ₹3,94,800 by November 2026. Like gold, this investment effectively returned nearly 3.75 times the capital deployed, demonstrating the resilience of physical assets over long cycles.
While these figures illustrate the benefit of long-term holding, investors should consider the broader financial picture. Unlike equity or debt instruments, physical gold and silver do not generate passive income such as dividends or interest. Investors only realize returns when they sell the asset, meaning the strategy relies entirely on price appreciation. Furthermore, the precious metals market is sensitive to global factors, including interest rate cycles, geopolitical tensions, and currency fluctuations, which can cause significant price corrections.
Taxation is another essential factor to keep in mind. Gains from selling physical gold, silver, or related financial products like gold ETFs or sovereign gold bonds are subject to capital gains tax in India. The holding period determines the tax rate, which can reduce the net return compared to the headline figures. Additionally, investors often face opportunity cost, as money locked into metals does not participate in the potentially higher growth phases of the stock market.
Ultimately, the data suggests that for those prioritizing wealth preservation and stability, regular accumulation can be a functional approach. However, investors must balance their asset allocation with other investment types, as relying solely on commodities may not meet specific financial goals regarding liquidity or regular income. The most important monitorable for those continuing this strategy remains the shifting global macroeconomic environment, which dictates short-term price direction.