With Gold crossing over the 1 Lakh mark in India, every fin-influencer is screaming from the rooftops to buy gold using fancy videos. As tempting as it sounds, I urge you to pause and be cautious. In 2023, I wrote a post on my blog on gold jewellery as as investment. While the price of gold has changed, the advice still holds good.
Gold and the inflation
There is a direct relationship between gold and inflation. For a middle class Indian, buying a house is almost impossible at the moment. With falling interest rates, turbulent markets and withdrawal of several Government backed schemes, buying gold seems like the only prudent course of action for investment. Festivals such as the upcoming Akshaya Tritiya, further encourage gold purchase, increasing demand and in extension, its price. Ironically, the price is what is discouraging most people from buying gold at the present.
Is gold a good investment in 2025?
In 2023 I said that, if you have the money and do not expect an immediate return on investment, then gold is a great investment. Those who invested then, have reaped a big profit by selling in this past week. In India, where people sell property to buy gold, it is a symbol of both status and a reserve to tap into during troubled times.
That being said, investing more than 10% of your gross income in gold, at the present is not very prudent. If you want to buy gold jewellery to wear, it is a different case. But buying it for purely from an investment perspective means that you are willing to take a risk. You need to consider your priorities both at the present and in the immediate future before you do so. Can you take it if the market corrects and the prices come down? However, there has been a slight dip in the market today for those interested in buying.
Jewellery, coins or ETF – which form of gold to buy
This is a common confusion that most of us have. The best choice is none of them but government issued sovereign gold bonds. Please note that there are no new issues and any bonds in circulation are sold in the secondary market. With plenty of scams afloat, please be extremely careful and avoid purchasing them if possible. If you hold SGB purchased via reputed banks from October 2017 and October 2018, then you can redeem them from today (April 23rd 2025). According to CNBC TV18 news, the redemption price has been fixed at ₹9,669 per unit.
Jewellery
If you are buying jewellery to wear or gift, by all means buy, wear, and enjoy. But if you are buying purely as investment, be careful about the type of jewellery that you buy. Buy only BIS certified, 22K plain gold solid jewellery, without enamel or stone work. Invest via monthly installments for additional savings. Most stores with monthly installment schemes offer to hold your amount for upto an year after maturity. This way you can wait until the price stabilises to purchase jewellery.
Coins
Contray to popular opinion you cannot get 100% value even for a certified bank coin when you sell it. You will get a higher value if you exchange gold coins for gold jewellery. But if you want cash, you must approach old gold buying agencies who will charge a minimum of 2% of total value + GST as handling charges depending on the city in which you live.
Buy 24 K coins only from reputed banks or the Post office and 22K coins from reputed jewellers. Do not buy on Amazon or Myntra even if the price is lower. Never buy coins with bails, gemstones, paintings for investment.
ETF
Gold Exchange traded funds can be bought and sold on the stock market similar to any other shares. You can even do a monthly SIP to purchase them. It doesn’t offer much return in the short term, you need a lot of patience and careful study to manage it. It is safe, has high liquidity, no GST during purchase. However, long term holdings attracts capital gain tax at 20% with indexation.
Digital Gold
This is gold stored in a digital form by providers and can be redeemed on purchase of physical gold. It is the easiest way to purchase gold today. You can even buy digital gold for one rupee but you must pay GST and storage fees. Check out the difference between buying digital gold and ETF here. Aso, carefully check certifications and credibility of the provider before purchase.
Should I sell my gold now or wait?
As always gold investment is a long range game. The prices may continue to increase or reduce if the market corrects itself. If you are satisfied with the return that you are getting at the moment and have other investment opportunities or purchase plans, by all means sell. Both selling and waiting have their own risks and rewards.
Will the price of gold increase further or decline sharply – we need to wait and watch.
Disclaimer
I am not a financial expert but a jewellery designer who has been studying gold appreciation in India over a decade. Therefore, I encourage you to consult your financial advisor before following my suggestions. Both the risks and outcomes of your decisions are your own and I offer no liability. Further, this post is targeted at the Indian middle class segment, youngsters who have just begun investing and the elderly and therefore prioritises caution over high returns.
I hope you find it interesting
Cheers
What do you think?