Kotak: Gold Jewellery a Poor Investment; Financial Gold Outperforms

• Kotak Institutional Equities advises against gold jewellery as an investment, recommending financial gold (ETFs, coins, bars) for better efficiency, transparency, and liquidity.
• Jewellery purchases involve significant premiums like making charges and stone prices, which reduce actual returns for households.
• Kotak estimates gold jewellery yielded only 10.3% returns between FY2011 and 1H FY2026, lower than the 12.5% compounded annual growth in gold prices.
• For jewellery buyers to break even, gold prices would need to rise by an additional 25-30%, assuming stable precious stone prices.
• High household preference for gold, particularly jewellery, negatively impacts India's macroeconomic balance by increasing imports and widening trade and current account deficits.

Why It Matters: Gold jewellery is a poor investment, impacting your finances and India's economic stability.