Physical gold, explained properly
Jewellery, coins and bars — the way Indians have held gold for generations. Culturally significant, often sentimentally valuable, but the least efficient option if your goal is purely investment returns.
How it actually works
1. You buy from a jeweller or bank
Jewellery, coins, or bars — price depends on purity (22K/24K), weight, and the day's gold rate.
2. You store it yourself
Home, bank locker, or private vault — the cost and risk of safekeeping is entirely yours.
3. You sell back when needed
Typically back to a jeweller — often at a discount to the prevailing market rate, especially for jewellery.
What it really costs
This is where physical gold loses to every other option — costs you pay but never get back.
| Making charges | 5–25% for jewellery (design-dependent), much lower (~3–8%) for plain coins/bars |
| GST | 3% on the gold value, plus GST on making charges separately |
| Storage & insurance | Locker rental or home-safe cost, plus theft/loss risk if uninsured |
| Resale haircut | Jewellery often bought back below prevailing rate; wastage/making charges are rarely recovered |
| Purity risk | Always insist on BIS hallmarking — unhallmarked gold can be misrepresented on purity |
Who this suits
Good fit
Weddings, ceremonial occasions, or genuine desire to physically hold gold — these are real reasons beyond pure investment math.
Less ideal fit
If the goal is purely financial return, the making charges alone put you behind every other option before gold even moves in price.
If you want gold exposure without the making charges, see Gold ETFs or Digital gold.