Gold is glimmering again, both literally and financially. As of October 2025, 24-carat gold in India trades near ₹1,29,440 per 10 grams, one of the steepest one-year rallies in recent history. With prices at all-time highs, many investors who missed early opportunities are now considering a bold yet calculated move, using a personal loan to invest in gold.
It sounds clever: borrow at a manageable rate, buy gold before it climbs higher, and repay comfortably from the profits. But how realistic is this approach in today’s market? Let’s find out by examining gold’s current trend, past performance, predictions, and whether borrowing truly adds value to your investment.
The Current Gold Reality in India
Gold prices in India have been on an unstoppable climb throughout 2025.
On October 15, 2025, the national average rate for 24K gold stood at ₹1,29,440 per 10 grams, which is up by about ₹990 from the past 2 days.
Here’s a quick city-wise snapshot:
| City | 24K Price (₹/10 g) | 22K Price (₹/10 g) |
| Chennai | ₹1,29,380 | ₹1,18,600 |
| Kolkata | ₹1,29,940 | ₹1,18,650 |
| Delhi | ₹1,29,590 | ₹1,18,800 |
| Mumbai | ₹1,29,440 | ₹1,18,650 |
This steady rise has surpassed global averages due to a weaker rupee, record domestic demand, and heavy gold ETF inflows, which touched $10 billion in AUM by September 2025, according to Reuters.
The takeaway? Gold remains one of the strongest wealth-preserving assets in uncertain times.
Monthly Gold Rate Trend 2025
| Month | Approx Price (₹/10 g) | MoM Change |
| Oct 2025 | ₹1,29,440 | +16% |
| Sep 2025 | ₹1,11,660 | +9% |
| Aug 2025 | ₹1,02,380 | +3% |
| Jul 2025 | ₹99,440 | +2.2% |
| Jun 2025 | ₹97,280 | +0.8% |
| May 2025 | ₹96,520 | +1.2% |
| Apr 2025 | ₹95,370 | +7.2% |
| Mar 2025 | ₹88,910 | +3.8% |
| Feb 2025 | ₹85660 | +6.4% |
| Jan 2025 | ₹80,510 | +3.2% |
Even after occasional dips, the overall 2025 curve has been sharply upward — rewarding early investors and attracting fresh interest.
Suggested Read: Physical Gold vs Digital Gold
Why Are Gold Prices Rising So Fast?
Gold’s surge is driven by a mix of global and local forces that continue to shape its demand:
- Inflation & Low Real Interest Rates: When inflation rises faster than savings returns, investors flock to gold for stability.
- Weak Rupee: A depreciating rupee inflates India’s gold import cost, raising retail prices.
- Safe-Haven Demand: Geopolitical tension and economic uncertainty make gold the preferred hedge.
- Institutional Buying: Central banks and ETFs are accumulating gold, shrinking available supply.
- Cultural Demand: With festivals and weddings peaking, domestic consumption remains strong.
- Import & Duty Policies: Taxes, supply limits, and logistics bottlenecks add a premium to Indian gold.
Together, these factors have created a perfect storm, pushing gold to fresh highs month after month.
What Experts Predict Next
Market analysts expect gold’s strong momentum to continue into 2026, though not without fluctuations.
- As of October 2025, 24K gold trades at ₹1,29,440 per 10g in India, a historic high.
- Broader 2026 forecasts from ICICI Bank, Goldman Sachs, and Bank of America suggest prices may climb further to ₹1.2–₹1.5 lakh per 10g, supported by U.S. rate cuts, central bank buying, and a weaker rupee.
- Short-term corrections of 10–15% are possible, but the medium-term trend remains bullish.
- Some experts believe that if the rupee weakens further or central banks maintain heavy buying, ₹1.5 lakh per 10 g could be reached by early 2026.
- Analysts view any dip as a buying opportunity, given gold’s continued role as a hedge against inflation and economic uncertainty.
Comparing Personal Loan Rates to Gold Returns
Before taking a loan to buy gold, it’s crucial to compare the cost of borrowing with expected gold returns. Here’s a snapshot of prevailing rates in India:
| Bank | Interest Rate (p.a.) | Processing Fee |
| HDFC Bank | 9.99% – 12.5% | 2% |
| SBI | 10.05% – 15.05% | 1.5% – 2% |
| ICICI Bank | 10.60% – 16.50% | Up to 2.5% |
| Average Range | 12% – 16% | Max. 2.5%(one time fee) |
With a healthy credit score you can typically secure a personal loan at an interest rate of 10% to 12% per annum. Including the processing fee, charges, and GST, a total borrowing cost of around 12% to 13%can be considered a reasonable and competitive rateto start with to buy gold.
Personal Loan to Buy Gold Calculation
Let’s go through an example calculation with a ₹5 lakh personal loan to buy gold.
Gold prices have surged by 16% over the past month. Even a modest 10% month-on-month increase can help you gain considerable profits, enough to cover your loan repayment and still leave a gain. Considering a short-term investment of one year, let’s break down the potential returns with the following calculation:
Calculation of Personal Loan expenses:
Loan Amount: ₹5,00,000
Tenure: 1 year
Interest Rate: 12% p.a.
Processing Fee: ₹10,000 + GST ₹5956 (18% on interest) = ₹15,956
Total Loan Repayment: ₹5,49,049
Total Cost of Borrowing: ₹49,049
Now, assume the ₹5,00,000 is invested in gold immediately at ₹1,29,400 per 10 g.
If Gold grows 10% per month, let’s go through the calculations below:
- Initial investment: ₹5,00,000 (via personal loan)
- Gold appreciation: +10% month-on-month (compounded)
- Loan interest: 12% per annum (~1% monthly)
- Processing fees & taxes are added to the total loan cost, which will be included in the monthly EMI.
| Month | Gold Return (%) | Gold Sale Value (₹) | Loan Interest (₹) | Net Gain (₹) |
| Nov 2025 | 10% | 550,000 | 5,000 | 45,000 |
| Dec 2025 | 10% | 605,000 | 4,606 | 1,00,394 |
| Jan 2026 | 10% | 665,500 | 4,208 | 1,61,292 |
| Feb 2026 | 10% | 732,050 | 3,805 | 2,28,245 |
| Mar 2026 | 10% | 805,255 | 3,399 | 3,01,856 |
| Apr 2026 | 10% | 885,781 | 2,989 | 382,792 |
| May 2026 | 10% | 974,359 | 2,575 | 4,71,784 |
| Jun 2026 | 10% | 1,071,795 | 2,156 | 5,69,639 |
| Jul 2026 | 10% | 1,178,975 | 1,733 | 6,77,242 |
| Aug 2026 | 10% | 1,296,873 | 1,307 | 7,95,566 |
| Sep 2026 | 10% | 1,426,560 | 875 | 9,25,685 |
| Oct 2026 | 10% | 1,569,216 | 440 | 10,68,776 |
Effective Gains = ₹10,68,776 – 2% Processing fee (~₹10,000) = ₹10,58,776 (₹10.58 Lakhs)
So, even after repaying the ₹5 lakh principal and covering the entire loan cost, you would still end up with a net gain of approximately ₹10,58,776.
If this sounds convincing, the first step is to apply for a personal loan and get it approved quickly to get the most benefit.
Note that this is based on the assumption of 10% month-on-month growth in gold. For another calculation example, check below.
Note that for personal loans, interest is charged on a reducing balance basis, meaning you pay a higher portion of interest in the initial months, which gradually decreases over time as the principal amount is repaid.
On the other hand, as per expert predictions, gold prices are expected to continue rising, implying that the value of your investment will likely appreciate month after month.
**Note:
This is a hypothetical compounding scenario; actual gold prices fluctuate and rarely grow linearly. It’s meant to illustrate how even moderate monthly gains can compound significantly versus fixed loan costs.
Personal Loan for Gold Purchase Yearly Calculation
The previous example illustrated month-on-month appreciation. Now, let’s look at a yearly gold price appreciation scenario with the following calculation.
- Initial investment: ₹5,00,000 (funded through a personal loan)
- Loan details: 12% annual interest + 2% processing fee + 18% GST on fee (₹49,049)
- Total loan outflow (principal + interest + fee): ₹5,49,049 after one year.
| Gold Return (%) | Gold Sale Value | Total Loan Cost | Net Gain | Outcome |
| 10% | ₹550,000 | ₹539,050 | ₹10,950 | Marginal Profit |
| 15% | ₹575,000 | ₹539,050 | ₹35,950 | Small Profit |
| 20% | ₹600,000 | ₹539,050 | ₹60,950 | Moderate Profit |
| 25% | ₹625,000 | ₹539,050 | ₹85,950 | Decent Profit |
| 30% | ₹650,000 | ₹539,050 | ₹110,950 | Good Profit |
| 40% | ₹700,000 | ₹539,050 | ₹160,950 | Strong Profit |
| 45% | ₹725,000 | ₹539,050 | ₹185,950 | High Profit |
| 50% | ₹750,000 | ₹539,050 | ₹210,950 | Excellent Profit |
This shows that after repaying the loan, they can get a gain of around ₹2 Lakhs with the rising gold prices.
So, at 20% growth or higher, the move yields decent gains. So, apply for a personal loan now and get started.
*Note: Actual results will vary with loan tenure, repayment type (EMI vs. lump sum), and gold market performance. This table assumes a simple one-year horizon for clarity.
Also Read: Why Gold is the Best Investment You Can Make in 2025
What You Should Keep in Mind
- Borrowing to buy gold is high-risk leverage, not a typical investment.
- Your gold return must exceed loan costs by at least 5–10% to make sense.
- Keep the loan tenure short (under 2 years) to reduce risk exposure.
- Include all expenses, processing fees, GST, making charges, taxes, and resale spread in your calculations.
- If you prefer safety, consider Gold ETFs or Sovereign Gold Bonds (SGBs), which offer liquidity and tax benefits.
In short, while a personal loan can open the door to quick investment, financial discipline must guide every step.
Conclusion
Gold’s 2025 rally is real, but chasing it with borrowed money can be a double-edged sword.Personal loans provide quick access to funds, yet their interest costs narrow profit margins. For most investors, the smarter long-term strategy is gradual accumulation through ETFs or SGBs, balancing opportunity with stability.
Disclaimer:
The above calculations are illustrative estimates based on assumed gold appreciation rates and average personal loan costs. Actual figures may vary depending on market conditions, lender-specific charges, repayment schedules, and fluctuations in gold prices. These examples are not investment advice and should not be relied upon for financial decision-making. Borrowing to invest in gold involves market and credit risks, and returns are not guaranteed. Readers are advised to consult a qualified financial advisor before making any investment or loan-related decisions.
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