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Economic Times
01-05-2025
- Business
- Economic Times
Think gold prices always go up? This CA shares 'ZERO returns data that will blow your mind'
As gold prices near ₹1 lakh, Nitesh Buddhadev advises investors to consider gold's historical performance. Gold offered minimal returns between 2012-2019 and 1992-2002. Recent price surges are due to macro events after a period of stagnation. Buddhadev suggests gold as a diversification tool, not a primary growth engine. Tired of too many ads? Remove Ads Gold has seen dull decades before Tired of too many ads? Remove Ads Why gold prices doubled since 2020 Realistic expectations, not hype Tired of too many ads? Remove Ads Gold demand falls despite price rise How jewellers determine the price of gold jewellery As gold prices hover around Rs 1 lakh per 10 grams, Chartered Accountant Nitesh Buddhadev has urged investors to look beyond the short-term rally and focus on gold's long-term performance. In a LinkedIn post backed by historical data, he pointed out that gold has delivered near-zero returns during long stretches in the past, despite the current excitement around its price 2012 and 2019, gold prices moved only slightly — from ₹31,050 to ₹35,220 per 10 grams. Buddhadev noted that such marginal movement translates to poor annualised returns.'Gold gave almost zero returns for 8 years,' he also pointed to an earlier example: between 1992 and 2002, gold moved from ₹4,334 to ₹4,990 per 10 grams.'Look at another decade of dull performance: 1992 to 2002 — Gold moved from ₹4,334 to ₹4,990 in 10 YEARS — that's less than 1.5% CAGR again!' he explained that the recent rally is a result of a long period of stagnation followed by major global events.'Because it had barely moved for 8 years before that,' he cited factors like COVID-19, war, inflation concerns, and central bank buying as reasons for the sudden price rise.'Every sharp rally often comes after a lull,' he made it clear that he is not advising against gold investment.'Am I saying don't invest in Gold? Absolutely not,' he clarified.'It's a great asset for diversification. It's a hedge in uncertain times. But it's not a consistent growth engine like equity. And it's definitely not risk-free.'He advised investors to manage expectations and avoid overexposure.'Don't get influenced by recency bias. Even Gold is volatile. Have realistic return expectations. It too goes through dull decades. Limit your allocation to say 5% to 12%, with a long-term view.'While gold prices rose 25% in the first quarter of 2025, India's gold demand by volume dropped 15%, according to the World Gold Council. The total value of gold purchases, however, increased 22% to ₹94,030 Shah, Managing Director of Kama Jewellery, says that gold prices often change due to global market movements. The final price of a gold jewellery item depends on a few key factors in pricing gold jewelleryJewellers begin with the daily price of 24-karat gold. Since jewellery is usually made in 22KT, 18KT, or 14KT, the price is adjusted based on purity. For example, 22KT gold has 91.6% pure gold, so its price is 91.6% of the 24KT gold rate. This adjusted rate is then multiplied by the weight of the gold in the jewellery charges cover the cost of crafting the jewellery and depend on the design's complexity. Jewellers may charge this either as a percentage of the gold price or as a fixed amount per gram.A 3% GST is added to the combined cost of gold and making charges. There may also be additional costs like hallmarking say the price of 24KT gold is ₹96,500 for 10 grams. The price of 22KT gold, which is 91.6% pure, would be ₹88,394 per 10 a gold chain weighs 8.9 grams, the gold cost will be ₹78,670.66 (₹8,839.40 per gram × 8.9 grams).If the making charge is ₹499 per gram, the total making charge would be ₹4,441.10 (8.9 grams × ₹499).The subtotal becomes ₹78,670.66 + ₹4,441.10 = ₹83, at 3% on this subtotal adds ₹2, a hallmarking charge of ₹45, the final price of the gold chain is ₹85,650.
Time of India
30-04-2025
- Business
- Time of India
Akshaya Tritiya 2025: Your gold jewellery costs more than price of gold; Check how jewellers calculate jewellery price
Why buying gold is considered auspicious on Akshaya Tritiya How jewellers calculate gold jewellery price Live Events Mathematical calculation for gold jewellery Particulars Amount Price of 8.9 grams 22KT gold chain Rs 78,670.66 (Rs 8,839.40 X8.9 grams) Making charges for 8.9 grams gold chain Rs 4,441.10 (Rs 499 X 8.9 grams) Total price of gold chain Rs 83,111.76 (Rs 78,670.66 + Rs 4,441.10) Adding GST @ 3% Rs 2,493.35 (3% of Rs 83,111.76) Hallmarking charges Rs 45 Final bill Rs 85,650 Gold purity in jewellery Fineness number 22KT 22K916 18KT 18K750 14KT 14K585 Gold prices are skyrocketing. The price of 24KT gold briefly touched the five-digit figure of Rs 1 lakh. Currently, the price of 24KT gold (999 purity) is trading over Rs 96,000. This makes it important to know how jewellers calculate the price of gold jewellery. Certain factors impact the final price of gold jewellery , such as the purity of gold, the price of any stone, making charges, taxes, and hallmarking Hindu culture, buying gold is considered auspicious on Akshaya Tritiya. This is because it is considered a way to welcome wealth and prosperity into their lives. The term Akshaya is associated with never diminishing. Buying gold on Akshaya Tritiya signifies perpetual prosperity and good Shah, MD of Kama Jewellery, says, "Gold prices are susceptible to global factors and tend to fluctuate with their movement. Several key components go into calculating the total price of gold jewellery."Shah explains these key components as follows:The crucial factor is the current market price of gold, which fluctuates daily. Jewellers use the price per gram of 24-karat gold as a baseline, as per the jewellery's karat, which could be either 22KT, 18KT or 14KT. For example, 22KT gold contains 91.6% pure gold. So, the gold rate of 22KT gold is 91.6% of 24KT gold price. This is then multiplied by the total weight of the gold in the encompass the cost of designing and crafting the jewellery, which varies according to the complexity of the designs. These charges are levied either as a fixed percentage of the gold price or as a flat rate.3% is levied on the final price (gold plus making charges), which gets added to the end of the is an example of how the jeweller calculates the gold jewellery price . Suppose the price of 24KT gold is Rs 96,500 per 10 grams. The price of 22KT gold will be 91.6% of Rs 96,500, i.e., Rs 88,394 per 10 you want to buy a gold chain that weighs 8.9 grams. The price of the gold chain would be Rs 78,670.66 (Rs 8839.40 multiplied by 8.9 grams).The jeweller charges a making charge of Rs 499 per gram. In this case, the making charges will be Rs 4,441.10 (8.9 grams multiplied by Rs 499 per gram).The total price of the gold chain will be Rs 78,670.66 + Rs 4,441.10 = Rs 83, GST at 3% would be levied on this. This would be Rs 2, final billing amount would be Rs 83,111.76 + Rs 2,493.35 + Rs 45 (for hallmarking charges) = Rs 85, to keep in mind while buying gold jewellerySometimes, a customer prefers to buy gold jewellery with a diamond or other stone affixed to it. As a customer, you should ensure that the price of gold and the diamond/stone are weighed separately. This is because when a customer wants to sell or exchange the same piece of jewellery, only the value of gold is considered. The stone's weight will be deducted from the total weight of the jewellery to arrive at the gold's Bureau of Indian Standards (BIS) asks customers to take the authentic bills and invoices for hallmarked gold jewellery from the jeweller. According to the BIS FAQs, "It is necessary to take authentic bills/invoices of the hallmarked article from the retailer/jeweller. It is necessary to have details of hallmarked articles in the bill/invoice issued by jeweller/retailer for any dispute/misuse/complaint redressal."If the gold jewellery has diamonds or other gemstones, the price of the stone must be reflected in the bill purity of the gold you are buying is important. The customer should ensure that the price of gold matches the purity of the gold you are buying. This means that if you are buying 18KT gold, then the price should be lower than the price of 22KT purity of gold is measured in Karat and fineness. For instance, 24KT gold comes in 995 and 999 fineness. The price of 999 fineness gold is higher than that of 995 fineness.24KT is considered too soft to make jewellery. Gold jewellery is usually available in 22KT, 18KT, and 14KT. Some jewellers also sell gold jewellery in 20KT.A 22KT piece of gold jewellery contains 91.6% gold. Other metals or alloys, such as zinc, copper, or silver, are added to the gold to strengthen and enhance its April 1, 2023, jewellers must sell gold jewellery with the 6-digit HUID code. Currently, hallmarked gold must have three signs: the BIS logo, purity and fineness grade, and a 6-digit unique alphanumeric code (also known as the HUID code).The customers can even verify the HUID code on the BIS Care BIS WebsiteIt is very common for customers to exchange their old gold jewellery for new ones. While buying new gold jewellery, it is important to understand the exchange policies of the jeweller. Some jewellers offer 100% gold value for exchange but only 90% gold value in lieu of one should check if there is a resale value for the diamond or gemstone in the jewellery.
Time of India
28-04-2025
- Business
- Time of India
Akshaya Tritiya is here but gold prices near Rs 1 lakh: Should you invest in gold this year or look at silver as an alternative?
Tired of too many ads? Remove Ads Reasons why gold prices are rising Tired of too many ads? Remove Ads Is it the right time to buy gold on Akshay Tritiya? Tired of too many ads? Remove Ads How can investors earn better returns from gold this Akshay Tritiya? Is buying silver a better option than gold this Akshay Tritiya? On April 22, 2025, gold briefly surpassed the Rs 1 lakh mark for the first time in India and is currently hovering around this milestone. As Akshaya Tritiya approaches in the next two days, which is considered an auspicious occasion to buy gold in India, the prices of the yellow metal might hit new highs. However, given the high prices, many are wondering if it is worth buying gold this year as Wealth Online explains why gold prices are rising, whether buying gold this Akshay Tritiya is a good idea, and what you can do for better to experts, gold prices are rising due to geopolitical reasons and US President Donald Trump 's unpredictable actions of imposing reciprocal tariffs on Shah, MD, Kama Jewellery, says, "The rise in gold prices is primarily influenced by the global economic uncertainties triggered by multiple events. The most important factor is Trump's tariffs and the US-China trade war. This, along with the turbulence from geopolitical tensions in the Middle East and Eastern Europe, has been the key concern, leading to a rise in gold as a safe investment haven across the globe, thus pushing up the gold price."Also Read: Can you sell old, un-hallmarked gold to buy new gold this Akshaya Tritiya? Concurring with Shah's view, Aksha Kamboj, VP, India Bullion & Jewellers Association (IBJA) and Executive Chairperson, Aspect Global Ventures, says, "The recent surge in gold prices can be attributed to a combination of global economic uncertainty, rising geopolitical tensions, and a weakening rupee. In times of instability, investors naturally turn to gold as a safe-haven asset. Additionally, central banks worldwide, including in emerging economies, have been steadily increasing their gold reserves to hedge against inflation and currency fluctuations. These factors together have created sustained demand and upward pressure on prices."According to a report in The Economic Times, the Reserve Bank of India (RBI) bought 57.5 tonnes of gold in FY 2024-25. This was the second-highest level of gold purchase in any financial year by the central bank after it started accumulating in December 2017. As on March 31, 2025, the RBI's total gold stock was 879.6 Mathur, Director-Commodities undefined a weaker dollar seen below 100 in the last few sessions has added to the momentum. Fundamentally, markets are pricing in increased geopolitical risks, fuelled by US trade tensions and stagflation concerns, which still have the potential to drive further gains for the yellow metal."The current environment suggests that trade-tariff wars and geopolitical concerns can further drive gold prices higher, unless there is a change in the situation, say experts. Hence, the question arises: should you invest in gold this year on Akshay Tritiya, like previous years?Deveya Gaglani, Senior Research Analyst-Commodities, Axis Securities, says, "For short-term investors, entering gold at current levels carries an elevated risk, given the nearly 30% rally year-to-date. However, we recommend a staggered buying approach for long-term investors, accumulating gold on dips - ideally in phases of 5-10% corrections."For many people, gold holds sentimental value. Shah says, "While the price is not much of a deterrent amid the gold-buying spree, the investment ticket size will probably shrink, given the landmark price rise of the yellow metal. However, gold still remains a lucrative asset class from the return on investment point of view, and people will look forward to this as a hedge against inflation."However, Mathur from Anand Rathi has a different view. "We still believe gold has room to rise further, up to 10-15% from the current levels of $3,800-3,850 per ounce in spot, translating to levels of Rs 1,05,000-1,08,000 per 10 gram in domestic futures markets in a time span of 3-6 months. Meanwhile, the current rally seems too fast, as the rise from Rs 90,000 to almost Rs 1 lakh took just 12 days, while the run from Rs 80,000 to Rs 90,000 took about 77 days, which indicates price corrections of up to 5-10 % are still possible in the near term, leading to volatility in prices," he from IBJA says, "Akshaya Tritiya is a time for auspicious beginnings, and buying gold on this day is a tradition believed to bring prosperity. While prices are high, gold has always been considered a timeless asset in Indian households. Even small, symbolic purchases, whether in physical or digital form or gold ETFs, hold long-term value and cultural significance. In that spirit, buying gold today is as much about faith as it is about financial planning."Gold prices are at a record high. What can investors do now to get better returns from gold this Akshay Tritiya?Gaglani from Axis Securities says, "A parabolic move in gold prices happens once in a few years. Gold has always proved its mettle as the most secure asset when it comes to economic uncertainty, war, crisis, etc. It is an excellent tool for portfolio diversification, protecting investments against volatile market fluctuations. Therefore, we recommend buying gold ETFs to diversify your portfolio, as they are highly liquid, efficient, secure, and cost-effective."Kamboj says, "For better returns, investors should focus on a diversified approach to gold. Along with traditional physical gold, options like digital gold offer added benefits, such as interest income and ease of storage. Timing the market is always tricky, but consistently allocating a portion of one's portfolio to gold, especially during uncertain times, has proven to be a smart long-term strategy.""For people looking at long-term investment, gold can serve as an ideal asset class," says Shah. "Investors must bank on the opportunity to invest in gold wherever the price witnesses a dip. For short-term investments, people can also consider gold ETFs and gold mutual funds, as they also bring multiple benefits," he who cannot buy gold due to high prices often buy other metals such as silver, copper, etc. Many prefer to buy silver coins or ornaments on Akshaya buying silver on this Akshaya Tritiya be a better option?Mathur from Anand Rathi says, "Akshaya Tritiya is always considered auspicious in India when buying gold or silver. However, gold has risen almost 21%, while silver returns are around 11-12 % year to date. Investing in silver with a long-term perspective of 1 year is likely a better option at current levels as compared to gold."Concurring with the view, Gaglani from Axis Securities says, "Gold has achieved an impressive return of over 25% this year, having seen significant gains. In contrast, silver is relatively more affordable now, as the gold/silver ratio is trading close to a multi-year high of 101. This suggests that gold may be approaching the overbought territory. Looking ahead, physical demand for silver is expected to rise in 2025 due to its essential role in solar panels, electric vehicles, 5G infrastructure, and semiconductor manufacturing. Furthermore, the global push for renewable energy is likely to increase demand, particularly from China and the US. Consequently, we anticipate that silver prices could deliver returns of more than 20-30% by the end of this year."
Time of India
23-04-2025
- Business
- Time of India
Jewellery makers expect steady gold demand despite rising prices
Surat: Jewellery manufacturers in Diamond City say demand for gold jewellery will be sustained despite rising gold prices , which crossed Rs 1 lakh for 10g on Tuesday. Manufacturers with gold stocks are calculating their profits and building buyer trust in gold. On the other hand, a potential drop in demand is also a concern. Currently, demand for jewellery is low as there has been no buying for the festive season or for weddings. While jewellery manufacturers say there may be a wait for a few days before buying restarts. "The rising prices show that buyers' faith in gold is growing. For manufacturers, it shows stronger markets and a good time to claim profits if they have stock," said Rajni Chanchad, director of Ayaani Diamonds. Colin Shah, MD, Kama Jewellery, is optimistic about a rise in demand. "It has been observed that gold prices witness a slight rise around festive seasons like Akshaya Tritiya, in anticipation of the spike in demand. Sentimental and cultural value attached to investing in gold on auspicious occasions will keep demand upbeat, irrespective of the price trend." Experts in the industry say demand continued to grow over the past few months despite price increases. Industry insiders predict that demand will continue to grow for the next few months. "People trust gold, which plays two roles, as jewellery and as investment. In case of a sudden price increase, people may stop buying for a few days, but it will start again as the wedding season or festivals come closer," said Jayanti Savaliya, regional chairman, Gem and Jewellery Export Promotion Council (GJEPC). "The prices are a concern for families with limited spending capacity as their expenditure may increase suddenly," Savaliya added.
