Dhanteras 2025: Nearly 20% of gold’s rally wasn’t gold at all, advisor warns buyers of hidden risk

This Dhanteras, investors rushing to buy gold may want to pause because, according to wealth advisor Ankur Jhaveri, nearly 20% of the yellow metal’s recent gains in India have nothing to do with gold at all.

In a LinkedIn post, Jhaveri explained how the rupee’s depreciation — not rising gold prices — has quietly fueled a significant part of the metal’s returns in India over the past five years.

“Most of the gold in India is imported. Which means it’s paid for in dollars,” he wrote. “So, when the rupee weakens, the price of gold in India automatically goes up, even if international gold prices stay flat.”

To illustrate the point, Jhaveri offered a simple scenario: someone who bought $500 worth of gold in 2020 — when the USD-INR rate was ₹73 — would have paid ₹36,500. Today, with the dollar at ₹88, that same gold would be worth ₹44,000. “That’s a 20% gain — purely because the rupee depreciated, not because gold appreciated,” he said.

But the trend could reverse. “Analysts are expecting the rupee to strengthen this year — from ₹88 to around ₹84 per USD,” Jhaveri noted. If global gold prices remain flat, Indian investors could see a 4.5% drop in returns — or worse, if prices fall.

He warned that gold’s INR performance hinges on two volatile levers: the international price of gold in USD and the USD–INR exchange rate. “Right now, both these levers look less favourable — gold is already trading near historical highs, and the rupee could most likely strengthen in the short term.”