CHENNAI: As gold prices go up and down, but mostly up, in the last few months, regret has struck many over not buying gold jewellery earlier. A closer look, however, shows a different background on why jewellery may not be the best investment route.
The substantial making charges and taxes drastically reduce potential profits upon resale, even when gold prices surge. In many cases, a good number of gold jewellery shops refuse to buy your jewellery and always insist on buying new jewellery rather than giving you cash for your gold.
For example, Teena purchased a 2.35-gram, 22-carat gold ring from a reputed Chennai jeweller in June 2025. The rate during purchase was Rs 9,130/gram, making the base value approximately Rs 21,455. However, a Rs 5,561 making charge and the GST took her bill to Rs 28,600.
Coming back to the present, on Saturday, the rate of 22k gold was Rs 14,900/gram. When Teena checked in about the ring's resale value, the jeweller offered her two options - Rs 33,727 in cash or Rs 34,590 as an exchange value for new jewellery.
Even after an investment of Rs 28,600 and a nearly double surge in gold rates, her potential cash profit is a mere Rs 5,127. This stark difference occurs because jewellers buy back gold primarily on its melt value (weight and purity), not its original purchase price. The hefty making charges and taxes paid initially are almost entirely lost.
This case clearly illustrates that gold jewellery should be valued primarily as an ornament, not a growth asset. While gold as a commodity may appreciate, the high premiums paid for jewellery craftsmanship and taxes make it an inefficient vehicle for investment.
Consumers looking for gold investment should consider options such as coins, bars, or ETFs that have lower premiums and are easier to liquidate at prices closer to the market rate.