Gold allocation rule: Divide your age by 2 to know how much gold to hold in your portfolio

A simple formula based on your age can help determine how much gold you should hold in your portfolio.

According to Alok Jain, SEBI-registered Investment Advisor and Founder of Weekend Investing, a simple thumb rule is to divide your age by two to arrive at the percentage of your portfolio that should be invested in gold.

The idea was shared by Sanjay Kathuria on X, along with a clip from an episode of the Sanjay Kathuria Podcast featuring Alok Jain.

How does age-based gold allocation rule work?

Kathuria wrote, “How much % of gold should be in your portfolio? Take your age, divide it by 2. That’s your percentage.”

“If you are 42 years old? 21% of your portfolio should be gold,” he wrote.

This rule means a 30-year-old investor should have 15% of his portfolio invested in gold, while someone aged 50 would keep roughly 25% in the precious metal.

For example, if a 30-year-old has a ₹20 lakh investment portfolio, about ₹3 lakh should be invested in gold under this rule. Similarly, a 50-year-old with the same-sized portfolio would allocate ₹5 lakh to gold.

The rule implies that gold allocation rises with age, increasing portfolio exposure to the metal over time.

Why doesn’t silver make the cut?

Kathuria said, “Silver doesn’t make the cut, even after its recent rally. Central banks accumulate gold. Nobody accumulates silver. Gold plays a monetary role; silver is just an industrial commodity riding EV and solar demand cycles.”

In simple terms, gold is widely held by central banks as part of their foreign exchange reserves and is often treated as a store of value.

On the other hand, silver derives a significant portion of its demand from industries such as solar panels, electronics and electric vehicles. As a result, its price is more closely linked to industrial demand and economic cycles.

How to rebalance gold allocation in portfolio?

Kathuria shared that, “You never exit gold. It just gets rebalanced every month. When it grows from 20% to 30% of your portfolio, you trim it back to 20%. That’s it.”

This rebalancing means that if an investor has a ₹10 lakh portfolio with a 20% target allocation to gold, the gold component is valued at ₹2 lakh. If gold prices surge and the gold portion grows to ₹3 lakh while the rest of the portfolio remains unchanged, gold would now account for roughly around 30% of the portfolio.

In such a case, the investor can sell the excess gold and bring the allocation back to the original 20% target.