Gold and crude oil: how commodities fit into an investor's thinking

Gold has been on a remarkable run. In early October 2026, 24-carat gold in India crossed about ₹1.5 lakh for 10 grams — near its highest ever. Crude oil, meanwhile, sat around $100 a barrel, swinging with news from around the world. When prices move like this, many people ask: should I invest in commodities too? Here is a simple explanation. It is for learning only.

What a commodity is

A commodity is a raw material — gold, silver, crude oil, copper, wheat. Unlike a share, a commodity is not a business. It does not earn profits or pay you anything. Its price moves purely on demand and supply. That one fact explains most of how commodities behave.

Why people buy gold

Gold is the commodity Indians know best. People turn to it for a few reasons:

• A safe feeling in bad times. When markets or currencies look shaky, people buy gold, and its price often rises.
• Protection from falling money value. Over long periods, gold has tended to hold its worth as prices rise.
• It does not depend on any company. Gold cannot go bankrupt.

But remember: gold earns you nothing while you hold it. It can also move sideways for years. Its recent jump does not promise more.

Why crude oil is different

Crude oil is harder for an ordinary investor. Its price can swing wildly on wars, global supply decisions and the world economy. Most people cannot buy real barrels, so oil is usually traded through futures, which are complex and risky. For beginners, oil is better understood than traded.

How commodities fit a portfolio

• As a small part, not the main plan. Many investors keep a modest slice in gold for balance, and leave it there.
• For balance, not quick gains. The point of gold is that it often zigs when shares zag — not that it makes you rich fast.
• Chasing a hot price is still chasing. Buying gold only because it just hit a record is the same mistake as chasing a hot stock.

Our own work focuses on a disciplined, rule-based equity Model Portfolio rather than commodities. But the lesson carries over: spread your money and avoid chasing whatever just went up. For more on that, see position sizing and diversification. You can also start a free trial.

Gold and oil are worth understanding. Just treat commodities as one small tool in a bigger plan — not the plan itself.