Should You Buy Gold? Investing in gold or Not?

Gold has always held a special place in our lives — but should we see it as just an ornament, or as a true investment? If you’re buying gold purely for decoration, it’s an ornament — a beautiful tool that sometimes even creates debt. But when you view it strategically, gold becomes a golden opportunity for investment.

No matter how many pieces of jewelry fill your closet, spotting a new design naturally tempts you to buy more. And many believe that instead of saving cash, it’s better to hold wealth in the form of gold. So the real question remains — is investing in gold truly profitable? And when is the right time to buy it?

Gold in Indian Tradition

In Indian culture, gold is deeply tied to the idea of Goddess Lakshmi — a symbol of wealth and prosperity. That’s why, across seasons and regions, gold purchases never really stop. Whether it’s jewelry, coins, or biscuits, buying gold is almost a tradition. investing in gold

Many also see gold as a form of investment, although there’s often confusion about when to buy. People tend to follow different theories. One common belief is that gold prices fall during a stock market bull run and rise during a bear market. However, experts suggest otherwise: gold prices are influenced more by bank interest rates than by stock market movements.

When interest rates on fixed deposits fall, the demand for gold rises. Conversely, when interest rates go up, people prefer investing in fixed deposits for safer returns, leading to a drop in gold demand.

Gold: A Safe but Moderate Investment

Gold is considered a movable asset. In emergencies, it’s relatively easy to liquidate without heavy losses. There’s flexibility — you can carry or move it when needed. However, for those chasing massive profits, gold may not deliver the excitement they’re looking for.investing in gold

Let’s take a simple example:
In 2012, gold (per 10 grams) was priced around ₹31,000. Today, it’s closer to ₹70,000. That’s a growth of about 2.25 times over a Pushkara (12-year) period. On an annual basis, gold has returned an average of less than 8% over the past decade.

While that might not sound spectacular compared to the stock market or mutual funds, it’s important to remember that gold is considered a risk-free investment. That’s why, whenever gold prices dip slightly, there’s a rush among buyers.

A Good Investment — But with Realistic Expectations

If you put aside the urge for double-digit profits, investing in gold is still a smart move. However, unlike mutual funds or the stock market, gold won’t offer sky-high returns over time.investing in gold

Mutual funds, for example, carry low risk and offer better returns, while the stock market has higher risks but also the potential for huge profits. Those who prioritize safety often prefer buying gold bonds instead of physical gold. After all, owning a few kilos of jewelry at home comes with its own stress — like rushing to store it securely in a bank locker!

Gold shouldn’t be viewed purely as an investment tool. Across both wealthy and middle-class families, buying gold is a way of life — whether it’s for daily wear or for major events like weddings. It’s common to craft small or large ornaments, enjoying the beauty of the metal rather than chasing financial gains.

The joy that comes from wearing dazzling gold jewelry simply cannot be compared to any other investment!

That’s why the advice is: Don’t stop yourself from buying gold — but be smart about it.
Instead of spending lakhs all at once, build your collection slowly.
Buy a tola or an aratula for your daughter’s birthday each year. By the time her wedding arrives, you’ll have 15-20 tolas ready, and you won’t need to scramble or spend huge amounts suddenly. You can even add more and decorate the bride like ‘Kanaka Mahalakshmi’ herself! investing in gold

And when that moment comes, you’ll find yourself saying: “I’m so glad we did this!”

Gold Prices — India vs America

Here’s an interesting point:
In 2012, the price of an ounce of gold (28.34 grams) in America was about $1,664.
At the same time in India, 10 grams of gold cost around ₹31,000.

Fast forward to 2022 — the gold price in the US for an ounce was about $2,684.
But in India, the price jumped to ₹54,500 for 10 grams.

While the rise in the US was less than $1,000 over a decade, the jump in India was about 75%.
Why? Two big reasons:

• The increase in import duties on gold. investing in gold

• The depreciation of the Indian rupee against the US dollar.

This shows that gold prices in India are influenced by factors beyond just global gold rates.

✨ About Me

Hi! I’m Manikanta Reddy, a passionate finance enthusiast with a strong understanding of money management, personal finance, and smart investment strategies. I believe financial literacy is the foundation of a secure and stress-free life — and I’m here to share practical insights, real-life examples, and simplified advice to help you make better financial decisions.

Whether it’s choosing between paying off a loan or investing, building emergency funds, or planning for retirement — I love breaking down complex topics into easy, actionable tips that anyone can follow.

Let’s learn, grow, and build wealth — the smart way. 💰