Introduction
Gold investment in India is more than just a financial decision—it’s a cultural ritual, an emotional experience, and a symbol of prosperity. From weddings to festivals, gold has long held a sacred place in Indian households. However as inflation rise and economic realities of jobs shift, many are asking: Is gold investment in India still the smartest way to invest?
Let’s explore our connection to the precious metal.
In the end, we will explore 9 alternatives to gold investment.
Gold affects us Indians on two spectrums.
- Happiness on the micro level
- Suffering on a broader level
Why Gold Investment in India Feels So Personal on micro level
How you ever bought gold? Believe me it is surreal feeling.
In India, gold is not just a shiny element—it’s an emotion. For generations, Indian men and women have adorned themselves with gold as a symbol of beauty, security, and tradition. From weddings to festivals, gold is woven into the very fabric of our culture.
Our family’s gold-buying, minuscule ritual is a cherished one. We usually visit Tanishq on weekends during festive seasons. The experience is grand—from valet parking to the gleaming displays, it feels like a celebration.
Interestingly, I’ve noticed something : the higher the gold price, the more grandiose we feel about the shopping experience. It’s as if the rising cost adds to the perceived value and excitement of the purchase.
We buy gold as it brings happiness and a feeling of ecstasy like no other. The glitter in her eyes and the happiness are all worth the gold investment in India.
How it cost us? – The Burden of Gold Investment on the Macro level
While we celebrate this golden legacy, there’s a side to the story that often goes unnoticed.
India is one of the world’s largest gold importers. Consequently, we spend a significant amount of foreign currency to satisfy our national appetite for gold.
Thus, directly impacting our economy. Gold imports increase our trade imbalance. This leads to :
- Pressure on the currency.
- Fueling the Fiscal Deficit
- Idle Wealth
To understand the scale, here’s a chart that depicts the amount of gold we bought over the years. While the emotional value is undeniable, the economic cost is substantial—especially when this wealth sits idle.
Unlike investments in businesses or infrastructure, gold often sits in lockers, not contributing to economic growth. Consequently, it limits the government’s ability to invest in infrastructure, education, and healthcare.
In a nutshell, it costs us insufficient infrastructure, education, and healthcare.
What can be changed? – Rethink Our Relationship with Gold
After gold is bought, how does it serve?
- It does not pay interest.
- It does not pay dividends.
- It sits there
Don’t believe me? Check the video what Warren Buffett says about investing in Gold.
A Personal Confession: My spouse and I do not believe in buying and holding jewelry as an investment. I am fortunate she shares the same feeling. We believe money can be invested better in income generating assets.
Let’s explore where money can be better invested.
Where can we invest instead of Gold?
This isn’t a call to abandon tradition. Rather, it’s an invitation to reflect.
If gold investment in India doesn’t pay, then what will?
Let’s explore 9 income-producing assets, Indianized for context and practicality
| Asset Class | Annual Return (%) | Pros | Cons |
|---|---|---|---|
| Equity Mutual Funds / Stocks | 10-14 | – Strong returns – High Liquidity | – Volatile – More financial literacy |
| Bank Fixed Deposit | 4-6.5 | – Safe – Less financial literacy | -Taxable nature |
| Property (Resi. / Commercial) | 8-12 | – Strong returns -Social status | – Low liquidity -Maintenance |
| Farmland / Agricultural Land | 6-9 | – Strong returns -Emotional value | – Low liquidity – Cash component |
| Govt Schemes (PPF/KVP/etc.) | 7.1-8.2 | – Safest – Less financial literacy | – Low liquidity |
| REITs (Embassy, Mindspace etc.) | 7-10 | – Real estate exposure – Regular dividends | – Variable Returns – Volatile – More financial literacy |
| Royalties (Music, Books, IP) | ?? | – Passive income – Creative satisfaction | – High risk – Low involvement |
| Build small business (Small shop, manufacturing firm, etc) | ?? | – Huge returns possible – Satisfaction | – Higher risk – High involvement |
| Build Large business (Zomato, Lenskart, etc) | ?? | – Generation Wealth possible – Deep satisfaction | – Highest risk – Highest involvement |
Conclusion
So, to answer the question, Should you invest in Gold, can finally be answered.
With the current run-up in gold prices, discarding its investment utility entirely would be impractical.
I, along with many financial experts, suggest, gold investment in India can be done :
- A modest allocation—especially in solid form—can still serve as a hedge and a source of emotional comfort.
- For the rest, let your portfolio be powered by assets that work while you sleep.
Despite all the economic logic, I must admit: buying gold is a shared joy. It’s a moment of celebration, a tradition many cultures cherish. The sparkle in her eyes when she finds the perfect piece? Worth every rupee.
Celebrate it for its beauty. Hold it with intention. But
So, to gold or not to gold? Maybe the answer lies in how we hold gold.
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