Dhanteras marks the onset of Diwali and tradition dictates that it’s an auspicious time to make investments. Gold holds a lot of cultural significance in India and is considered a symbol of wealth and prosperity. Moreover, it’s always considered as one of the best forms of investment. So, if you’re looking to buy gold for the first time this Diwali, you may be wondering how to go about the process, what are some things you need to keep in mind, and who can you turn to for the best advice?
Well, we have you covered because we got in touch with experts from the industry like Yash Agarwal, Creative Director, Birdhichand Ghanshyamdas Jewellers; Vipin Sharma, Chief Merchandising Officer of BlueStone; Ketan Patel, CEO of Isarva Fine Jewellery and Archana Thani, a jewellery curator and consultant.
Below, we’ve listed some frequently asked questions that first time gold buyers may have. Their answers and advice should help you make an informed decision.
1. How Much Money Do You Need To Keep Aside To Buy Gold?
While this question is largely subjective, a lot of young people dismiss the idea of buying gold thinking they do not have a large enough budget for it. However, that is not the case. Who says you need a five digit budget to invest in gold? A gold coin weighing 1g is also available to buy for less than INR 8,000. And while it may not seem like much, the thing to keep in mind is that the value of gold will only rise with time.
“Gold, as an investment, offers a distinct blend of attributes. Foremost, gold stands as a timeless hedge against inflation. Its value tends to rise when other assets falter, thus diversifying one’s holdings. Beyond the balance sheet, gold transcends the traditional concept of an ‘investment’. It is both an articulation of abundance and an expression of personal style. Gold also acts as a safety net in times of crisis. As a tangible asset, it can be quickly converted to cash, often more easily than traditional currency. In such moments, the liquidity and reliability of gold become evident. Investing in gold is not only a financial decision, but also a deeply personal one. Therefore, allocating a percentage of your savings to gold, periodically or as you see fit, is a prudent strategy,” advises Vipin Sharma, Chief Merchandising Officer of BlueStone.
CEO of Irasva, Ketan Patel recommends keeping 5-10 percent of your investments as gold.
2. Why should one invest in gold, over other forms of investments?
You may think that using those savings towards buying stock or investing in crypto could help get you higher returns. And that would be true in a world free of economic instability and currency fluctuations. But since that is not the case, gold is considered to be the most reliable investment.
Yash Agrawal, Creative Director of Birdhichand Ghanshyamdas Jewellers, believes that gold is an investment, which over time, has shown a constant yield of return. And besides being the most liquidable investment, it can be hedged, loaned and mortgaged.
3. Between jewellery and coins, which is the most sensible item to pick?
“The choice between jewellery and coins, while seemingly straightforward, is a matter of personal inclination and the specific intent of one’s purchase. Jewellery possesses an intrinsic allure, not merely as an investment but as a wearable piece of art that reflects one’s style and personality. In this regard, jewellery transcends the realm of wealth preservation, becoming an extension of one’s identity. However, coins hold their merit, particularly in scenarios where a swift and uncomplicated choice is desired. Additionally, coins make for a neutral and universally appreciated gift,” advices Vipin Sharma.
While Ketan Patel and Yash Agrawal, both resonate that if you buy jewellery then you can wear it and enjoy it, whereas coins are a pure form of investment only.
4. How do I know if I’m getting the best quality of gold? Are there any licenses or certificates to look out for?
Archana Thani, a jewellery consultant and someone who regularly curates the most trending jewellery on Instagram, shares that buying gold from reputable brands or designers will most likely always have a hallmark. “Certificates from respected assayers or government agencies ensure the quality of gold. This is something you should definitely look out for. In India, the Bureau of Indian Standards (BIS) provides certification for gold jewellery. Under the Indian hallmarking system, jewellery that meets the BIS standards is marked with a BIS logo, a purity mark indicating the fineness of the metal (such as 22K, 18K, or 14K), the hallmarking’s centre’s identification mark (HUID), and the jeweller’s identification mark.”
BlueStone’s Chief Merchandising Officer, Vipin Sharma, says, “The HUID number enables customers to access the product’s records on a government website, offering transparency and assurance of the gold’s purity and quality. Moreover, in our physical stores, we provide the option of having the purity of your gold verified through a Karatmeter. This device offers an accurate and instantaneous assessment of the gold’s purity, further establishing trust and confidence in the quality of the jewellery you purchase.”
5. What is the significance of karats? As a first time gold buyer, how many karats should I be looking to buy?
Karats are a measurement of the purity of a gold. The math to remember is that higher the number of karats, purer the gold i.e. more gold content in a piece. So, 24K gold is considered to be the purest form of gold, with 99.9% gold and it’s the most expensive option of them all. 22K gold is 91.6%, while 18K gold is 75% gold and 25% other metals. In 14K gold, the gold content is 58.3%, while the remaining 41.7% is made up of other metals.
Archana Thani advises, “For a first time buyer I would consider three aspects: budget, colour, and durability. If budgets play a big role in your purchase, I would consider 14K or 18K — they’re common choices for jewellery. Personally, I wear a mix of 14K and 18K products as they offer a good balance between purity and durability. If budget isn’t a question, I’d look at aesthetics. The higher the gold purity, the brighter the gold. In the east, people tend to use a lot of 22K or 24K which gives you that brighter yellow gold, however in the west, the preference is generally 14K or 18K for a less intense gold colour. In this case, if you prefer that bright yellow gold and see yourself only wearing more of that intense gold, it’s worth saving up to get something you really like and will wear.
However, If you’re the type of person that tends to be less careful with your jewellery, 14K might be a better option for you. The alloying metals in 14K gold provide greater strength and durability compared to a higher purity gold. 14K gold is less likely to scratch or deform and the colour difference between 14K to 18K isn’t as drastic as it is from 24K to 18K.”
6. What is the fairest deal to look out for, when it comes to labour charges?
One of the “hidden costs” of buying jewellery are labour or making charges, which signify the fee of the craftsmanship and man hours gone into creating the piece. Vipin Sharma states, “The determination of fair labour charges in the landscape of fine jewellery is an intricate calculation that depends on a multitude of factors. Some of these factors, especially in India, are the technique, craftsmanship and complexity of a design. In India, the making charges are notably one of the lowest in the world. Irrespective of the specific item one intends to purchase, the overall value of fine jewellery remains advantageous due to the industry’s unique mechanics. India is home to a pool of highly skilled artisans who have honed their craft through generations, thereby offering a cost-effective labour force. As such, when purchasing jewellery in India, one can rest assured that they are getting a favourable deal, anchored in the expertise and dedication of these craftsmen.”
Echoing the same sentiment, Yash Agrawal and Ketan Patel also suggest that you should not not base your decision on labour charges, but rather decide to buy something that you see and fall in love with. You can’t put a prize on skills and craftsmanship.
Archana Thani suggests that you should also be doing your research, if you’re not in the market for a design-led piece. “There’s no real rule of thumb on how much you should be spending on labour, but what I would suggest is, if you’re looking for simple pieces of jewellery, like an 18K gold band for example, you should do your market research, know what’s out there and compare prices and materials from several retailers, brands and independent designers. The more you see the more you will be able to gauge a price range.”
7. Are diamonds as valuable an investment as gold?
“Gold and diamonds are different types of investments. Gold is considered a more stable and liquid investment as it’s a daily traded commodity, while diamonds can be less predictable. The value of a diamond can be influenced by factors like rarity, size, colour and cut, but could also be subject to what’s in demand in the market currently. If you’re looking at a long-term investment, gold would be a safer choice,” suggests Archana Thani.
Birdhichand Ghanshyamdas Jewellers’ creative director, Yash Agrawal, believes that both gold and diamonds are great forms of investments. But the only difference is that gold is asserted as a market value i.e. the value of the gold is fixed internationally. It can be converted into cash anytime. Whereas, diamonds also have a fixed market value, but it’s variable from region to region and is not as easily convertible into cash.
“Diamonds occupy an aspiration-driven space, a segment that has been growing rapidly in recent years. It’s important to note that every retailer may have its own practices, and it’s important for consumers to be discerning. Buyers should also look out for certifications from esteemed organisations such as Solitaire Gemological Laboratories Ltd. (SGL), International Gemological Institute (IGI), and Gemological Science International (GSI) to ensure the utmost quality and authenticity of their purchases,” advises Vipin Sharma of BlueStone.
8. What is your opinion on repurposing old gold jewellery?
Jewellery in the form of heirlooms are passed down from generation to generation. However, due to a difference in each individual’s taste and styles, there has been a growing trend of repurposing older jewellery. It’s also a sustainable and cost effective alternative and buying something new. Archana Thani says, “I love the idea of repurposing jewellery. That’s the beauty of buying gold, you can breathe new life pieces that may be sitting unused or have sentimental value. It also feels less daunting to me to know that if in a few years my personal style changes, I have the flexibility to make something completely different without feeling like I’m adding to creating more waste.”
In agreement, Vipin Sharma states, “Repurposing older jewellery is a great way to unlock the latent value of pieces that may have gone out of trend or simply remain tucked away in lockers.”
A lot of brands including BlueStone and Isarva offer bespoke services to recreate your old jewellery. The latter brand’s CEO, Ketan Patel says, “Repurposing older jewellery can be a fantastic way to preserve sentimental value and give your heirloom pieces a new life.”
Now that you’re equipped with the basic knowledge to become a successful and smart gold buyer, take advantage of the occasion and add to your wealth.