As Diwali draws near and Dhanteras shopping season sets in, gold prices in India have reached all-time highs, drawing the interests of investors and families alike. But Sridhar Vembu, the founder of Zoho, cautions against treating gold only as a money-making proposition.
Going online, Vembu clarified, “Gold is also flashing a big warning signal. I don’t think of gold as an investment, I think of it as insurance against systemic financial risk. Ultimately finance is all about trust and when debt levels reach this high, trust breaks down.I am sure AI will work hard to repay all the debt in the system”
I agree with Dr Gita Gopinath.
The US stock market is in a clear and massive bubble.
The degree of leverage in the system means that we cannot rule out a systemic event like the global financial crisis of 2008-9.
Gold is also flashing a big warning signal. I don’t think of… https://t.co/7xVPL3FXDq
— Sridhar Vembu (@svembu) October 18, 2025
Gold Prices Surge 63% Over the Year
Gold’s surge has been breathtaking. It has risen from about Rs 78,840 per 10 grams in Dhanteras 2024 to Rs 1,28,200 in 2025, earning investors a 63% profit in the past year. For comparison, the Nifty 50 index has trailed behind, and gold’s current performance makes it look irresistible but Vembu cautions.
Analysts cite the combination of fear-driven demand, uncertainty in the global economy, and strategic central bank purchases. “Finance always hinges on trust,” Vembu said. When that trust falters, investors seek refuge in gold.
Geopolitics and Central Banks Drive Demand
Market analysts cite geopolitical tensions, trade wars, and sanctions as some of the key factors behind the bullish sentiment in gold. Central banks globally have also been accumulating gold to diversify reserves away from the US dollar, constricting global supply and driving prices upward.
Festive Season Buying Remains Strong
Even at stratospheric prices, Indian consumers continue to purchase gold on Dhanteras and Diwali for cultural and emotional reasons. Jewellers see constant demand for light weight jewellery, coins, and bars, as customers enter the market gingerly.
Gold Gifts: Tax Rules You Should Know
Gold gifts are tax-exempt primarily when received from relatives, such as parents, spouse, siblings, children, and in-laws. Gifts from friends or non-relatives are taxable if over Rs 50,000 in a financial year. Selling gold also has tax implications:
Short-term gains (sold within 3 years): Taxed based on income slab
Long-term gains (sold after 3 years): Taxed at 20% with indexation benefit
Bottom Line: Gold as Insurance, Not a Get-Rich Tool
Vembu’s message is unequivocal: gold is a hedge against financial risk, not a surefire means of multiplying riches. Although it is a favourite among investors during the season of celebration, investors must determine their financial objectives and not be lured by record-high prices alone.
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Sofia Babu Chacko is a journalist with over five years of experience covering Indian politics, crime, human rights, gender issues, and stories about marginalized communities. She believes that every voice matters, and journalism has a vital role to play in amplifying those voices. Sofia is committed to creating impact and shedding light on stories that truly matter. Beyond her work in the newsroom, she is also a music enthusiast who enjoys singing.
