Kotak: Gold Jewelry Needs 25-30% Price Jump To Break Even

• Gold jewellery requires a 25-30% price increase for households to break even, making it a poor investment, according to Kotak Institutional Equities.
• High making charges and precious stones in jewellery significantly reduce the 'wealth effect' and offset gains from rising gold prices.
• Indian households primarily hold gold as jewellery for insurance, exigencies, and specific large expenses, particularly among low-income groups.
• Kotak recommends financial gold (ETFs) or physical gold (coins, bars) over jewellery for investment purposes.
• Increased household allocation to gold can negatively impact India's external sector by widening current account and trade deficits.

Why It Matters: It shows gold jewelry is a poor investment, affecting your wealth and India's economy.