What Happens When Gold or Silver Prices Rise After You Start a Shagun SIP?
Gold and silver prices do not remain the same every month. They may rise or fall depending on market conditions. If you have started a fixed-rupee SIP, a price change generally affects how many mutual fund units your fixed investment can purchase.
A Shagun SIP works differently. You begin with a gram denominated target, while the rupee amount required for the instalment changes based on the applicable price. This makes it useful to understand what happens when gold or silver prices rise after you start investing.
First, understand the basic idea
With a regular SIP, you usually decide how many rupees you want to invest each month.
With Shagun SIP, you choose a gram denominated target for gold or silver. The investment is then made through Axis Gold Fund or Axis Silver Fund of Fund, depending on the metal selected. Your holding is in the form of mutual fund units, not physical gold or silver.
The simple difference is:
Regular SIP: Rupee amount stays fixed, while the quantity represented may change.
Shagun SIP: Gram target is selected, while the required rupee amount may change.
What happens when prices rise?
When the applicable price of gold or silver rises, more money may be required for the same selected gram target.
For example*, if you select a target of 1 gram of gold and the illustrative price rises from ₹10,000 to ₹10,500 and then ₹11,000 per gram, the indicative SIP amount would also increase from ₹10,000 to ₹10,500 and then ₹11,000. The gram target remains the same, while the rupee amount changes with the applicable gold price.
In this illustration, the gram target remains 1 gram, but the indicative rupee amount increases as the reference price rises.
The same principle applies to silver. If you select a particular silver gram target and the applicable silver price increases, the required rupee amount will also increase.
*These figures are hypothetical and only explain the variable-instalment concept. Actual calculations and unit allotments are subject to the applicable price, NAV, scheme terms, expenses and other charges.
Why does the instalment amount change?
The purpose of a gram-linked SIP is to let investors begin with a weight-based goal rather than a fixed rupee contribution.
For example, someone planning for a wedding or family milestone may find it easier to think, “I want to plan for one gram every month,” rather than trying to estimate what a fixed monthly amount may represent after several years.
As the market price changes, Shagun SIP adjusts the required rupee amount for the selected gram target. The official Shagun page describes this as a gram-linked approach under which the monthly investment amount adjusts with gold or silver prices.
Which price is used for the calculation?
The Shagun SIP instalment is not calculated using the price visible on the SIP date.
The calculation uses the closing MCX spot price available on the sixth day before the SIP instalment date, known as T-6.
For example, if your chosen SIP date is the 15th, the applicable price reference will be determined according to the T-6 rule rather than simply using the price shown on the 15th.
The exact transaction is subsequently processed according to the applicable scheme and NAV rules.
Does a higher price mean your investment has gone wrong?
Not necessarily. A rising price simply means that the same gram target may require a higher rupee contribution.
The purpose of Shagun SIP is not to predict whether gold or silver prices will rise or fall. Its focus is to help investors follow a disciplined, gram-linked approach across different market levels.
Rather than waiting endlessly for the “perfect” price, an investor can connect the SIP to a meaningful goal and continue investing systematically. Shagun SIP emphasises on regular investing, patience during market movements and periodic reviews rather than reacting to every short-term change.
What if prices fall later?
The adjustment works in both directions.
If the applicable gold or silver price falls, the indicative rupee amount required for the selected gram target may also reduce.
For example:
• At ₹11,000 per gram, the indicative amount for 1 gram would be ₹11,000.
• If the applicable price later falls to ₹10,300 per gram, the indicative amount would reduce to ₹10,300.
This two-way adjustment is what makes Shagun SIP different from a conventional fixed-rupee SIP.
Plan for a changing monthly debit
Since the required rupee amount can increase or decrease, it is important to choose a gram target that remains comfortable for your household budget.
A larger gram target may feel attractive when prices are lower, but it could require a noticeably higher contribution when prices rise. Starting with a manageable target may make it easier to continue your investing habit through different price cycles.
Investors should also ensure that their registered bank mandate provides sufficient room for a changing instalment amount. The official terms state that the Shagun SIP instalment must remain within the maximum mandate amount.
Remember what you actually hold
Although the investment journey is expressed in grams, the investor receives mutual fund units through Axis Gold Fund or Axis Silver Fund of Fund. No physical gold or silver is purchased or delivered.
The units allotted may not correspond exactly to the selected grams because of price fluctuations and other charges. Redemption proceeds are also paid in money and not in physical metal.
The key takeaway
When gold or silver prices rise after you start a Shagun SIP, your selected gram target continues to guide the investment, but the rupee amount required for the instalment may increase.
That is not an unexpected change. It is the basic design of a gram-linked SIP.
By choosing a manageable gram target, keeping enough flexibility in your monthly budget and staying connected to a meaningful long-term goal, you can use Shagun SIP as a disciplined way to plan for gold or silver exposure through mutual fund units.
*Note: Investors will be bearing the recurring expenses of the scheme in addition to the expenses of underlying schemes in which Fund of Funds scheme makes investment.
Axis MF/AMC is not guaranteeing any returns on investments.
The units allotted may not correspond to the exact grams due to price fluctuation and other charges.
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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