Gold continues to glitter — but this time, more in the form of coins and bars than heavy ornaments. With prices hovering near ₹1.32 lakh per 10 grams, Indian consumers are rethinking how they buy gold this festive season.
According to a recent Reuters report, jewellery demand has dropped nearly 30% year-on-year, while sales of coins and small bars have surged. Rising making charges and record-high bullion prices are pushing buyers toward simpler, investment-grade options.
🔹 Why Are Buyers Moving Away from Jewellery?
- Skyrocketing Prices
Gold prices have jumped over 60% in the last 12 months, hitting all-time highs. For many households, traditional ornaments have simply become unaffordable. - High Making Charges
Jewellers typically charge 10–20% making fees on ornaments — costs that don’t apply to coins or bars. In today’s market, these charges make a big difference in overall affordability. - Focus on Pure Investment Value
Coins and bars are valued purely for gold content, making them easier to sell, pledge, or store for future gains. Jewellery, on the other hand, carries design and making value that may not be fully recovered upon resale. - Rising Digital Gold & ETF Options
Many young investors prefer digital gold, ETFs, or Sovereign Gold Bonds (SGBs), offering purity assurance and tax benefits without storage issues.
🔹 Market Snapshot
| Type | Average Demand Change | Typical Buyer Trend |
|---|---|---|
| Gold Jewellery | ↓ 30% | Lighter designs, lower caratage |
| Gold Coins | ↑ 40% | Favoured for gifting and saving |
| Small Bars (20g–50g) | ↑ 25% | Investors and business owners |
| Digital Gold / SGBs | ↑ 20% | Millennials and salaried professionals |
Gold dealers across Mumbai, Chennai, and Hyderabad confirm that demand for coins of 2–10 grams has jumped sharply ahead of Diwali.
🔹 What’s Driving the Price Surge?
- Global Safe-Haven Demand: Investors worldwide are turning to gold amid economic and geopolitical uncertainty.
- Weak U.S. Dollar: A softer dollar and expectations of rate cuts in 2026 are making gold more attractive globally.
- RBI’s Gold Accumulation: India’s central bank holdings have crossed US $100 billion, strengthening domestic price sentiment.
- Festive & Wedding Season Demand: Seasonal buying keeps domestic demand resilient despite high prices.
💰 The Tax Perspective (For Stox n Taxes Readers)
Whether you buy gold jewellery, coins, or bars — tax implications remain similar, but with some important distinctions:
- Capital Gains Tax:
- Short-Term (≤ 3 years): Taxed at slab rates.
- Long-Term (> 3 years): 20% tax with indexation benefit.
- Sovereign Gold Bonds (SGBs):
- Interest (2.5% p.a.) is taxable, but no capital gains tax on redemption after 8 years — making SGBs a smart long-term investment.
- GST Impact:
- Jewellery and coins attract 3% GST, but resale of old gold may attract marginal GST based on transaction mode.
💡 Tip: Keep all purchase invoices — they’re vital for proving cost basis during future sale or redemption.
🔹 Investment Outlook
Analysts expect gold to stay firm near current levels through Diwali, but warn of possible correction post-festive season once demand cools.
For investors:
- Continue SIP-style buying through digital gold or SGBs.
- Avoid lump-sum purchases at current highs.
- Consider diversifying 5–10% of total portfolio into gold for stability.
💬 Expert Quote
“This year’s gold rush is led by investors, not ornament buyers. Coins and bars have become the new jewellery for the middle class,”
— Senior Analyst, All India Bullion & Jewellers Association.
❓ FAQs
1. Why are gold jewellery sales down this Diwali?
High prices and steep making charges have made traditional ornaments expensive, pushing buyers to coins or bars instead.
2. Are gold coins better than jewellery for investment?
Yes. Coins and bars offer higher purity, lower costs, and easier resale value than ornaments.
3. Will gold prices fall after Diwali?
Analysts expect a mild correction after the festival season once consumer demand tapers off.
4. What’s the safest way to invest in gold today?
For tax-efficient and storage-free investment, Sovereign Gold Bonds (SGBs) and Gold ETFs are preferred options.
5. Should small investors buy digital gold?
Yes, but only from trusted platforms (Groww, Paytm, PhonePe, etc.) with secure storage tie-ups. Convert to SGBs or physical gold over time.
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