Dhanteras gold buying: jewellery, coins or gold ETF, which suits your budget

Buying gold on an auspicious occasion is a custom in India, and buying it on Dhanteras is an old tradition in Indian families. Many people buy gold jewellery, coins or gold biscuits on the day. But the way people invest in gold has changed with time. Gold is no longer bought only at a jeweller's shop.

Options such as gold exchange-traded funds (ETFs) and Sovereign Gold Bonds are now available in the market. Anyone planning to buy gold on Dhanteras or Diwali should first check which option suits their budget.

Coins come first. For those who want to buy gold on the festival but do not want jewellery, gold coins can be a good option. Coins generally carry a lower premium than jewellery. At the time of purchase, buyers should check purity, certification and the seller's buyback policy. Some deductions may apply when selling, and this too should be kept in mind.

Most people prefer to buy gold jewellery on Dhanteras. But if the only aim is investment, jewellery is not considered a profitable deal. The reason is the making charges and GST, which have to be paid separately when jewellery is made. When the jewellery is sold later, neither amount is returned. A purity check and other deductions can also bring down the price received. Jewellery is therefore suited to those buying it to wear or to give as a gift.

Sovereign Gold Bonds (SGB) were earlier quite popular with investors. They offered returns linked to the gold price along with a fixed interest rate. But the government has not issued any new SGB series since February 2024. As a result, investors can no longer buy them directly through a new government scheme. For now, older bonds may be available in the secondary market. Before buying them, it is important to check their price, liquidity and tenure.

Gold ETFs are a useful option for those who want to benefit from movements in the gold price without buying physical gold. They can be bought and sold on the stock market through a demat and trading account. There is no worry about keeping gold at home or safeguarding it, and no making charges apply. Investors should, however, look at the fund's expense ratio, brokerage and transaction charges. The price of a gold ETF can also differ slightly from the price of physical gold.

According to experts, given the swings in gold prices, investors should not put in the entire amount at one time. Making small purchases at different times could be a better approach. Ponmudi R, CEO of Enrich Money, said investors should keep price, liquidity and their entire portfolio in mind when making an investment decision.

On the whole, jewellery for personal use, coins for holding physical gold, and ETFs for investing in the gold price can be useful options. The right choice depends on one's needs and investment goals.