Kotak: Gold Jewellery is a Poor Investment; Financial Gold is Superior

• Kotak Institutional Equities advises Indian households that gold jewellery is a poor investment compared to financial gold (ETFs, coins, bars).
• Jewellery incurs high premiums like making charges and precious stone costs, significantly eroding investment returns.
• Kotak estimates gold jewellery yielded only a 10.3% IRR (FY2011-H1 FY2026), below the 12.5% rise in gold prices.
• For jewellery buyers to break even, gold prices would need to increase by another 25-30%.
• Increased household preference for gold over financial assets risks worsening India's trade and current account deficits due to higher imports.

Why It Matters: Your gold jewellery investment might be losing money and hurting India's economy.