Gold coin vs Jewellery - Which is the best option for investment?

It has been ingrained in us Indians to mark special and auspicious occasions by buying and gifting gold. Be it a wedding or the arrival of a baby, we like to gift this yellow metal to express our love. Gold coins and bars are made of the purest form of gold and are generally bought for investment purposes. Gold coins and bars could either be converted into jewelry in the future or sold off to generate cash for financial needs. There’s a sense of pride, prosperity, and satisfaction in gold investments. And the value of gold has kept on appreciating making this precious commodity extremely rewarding. However, before investing in gold, online or physical gold, one should be aware of his/her objective as well as the pros and cons of each. An excellent hedge against market volatility and inflation, gold is a great addition to a diversified investment portfolio.

How to Invest in Gold: Best Gold Investment Plans

Different individuals purchase gold for different purposes. For some it could be for aesthetic reasons and for others, it could be purely financial. Depending upon factors like end purpose, safety, and personal and financial goals, an investment in gold should be made. Buying gold coins, bars, bullion, jewelry etc. are the traditional ways of buying gold. Online gold investments consist of tools such as Digital Gold, Gold ETFs, Sovereign Gold Bonds, Gold Mutual Funds, and Gold Stocks. And the best way to invest in gold for you will depend upon your investment risk appetite, attitude, and aptitude.

Let us look at some of the ways you can put your money into this precious metal:

Digital GoldPhysical Gold

PurityPurity is guaranteed.Purity is not always ensured.

PriceCost of digital gold is same across the country.Gold prices of physical gold items are not consistent.

QualityDigital Gold is always of 24 karat or 995 purity.Gold Jewelry could be anywhere from 18k-22k. Gold coins are bars are usually 24 karat.

TransparencyThe entire process of buying digital gold is regulated and well-documented.Although BIS Hallmarking is a mark of authenticity, many local jewelers sell adulterated gold.

LiquidityHigher liquidity than physical gold.Selling of physical gold articles can take time as it requires finding the right gold value.

Storage and SecurityThere’s no fear of theft and robbery. No safe deposit lockers are needed.Arrangements have to be made to store physical gold safely and securely.

Gold Coin vs Gold Jewellery: Which is a Better Investment?

Gold's attractiveness has made it a tempting asset for those looking for risk diversification. And the demand refuses to slow down. If you decide to take the traditional route of investing in gold, you can buy gold jewelry, gold coins, gold bullion, or gold bars. Gold jewelry is usually an emotional and personal investment whereas gold coins are purchased mainly for financial reasons. So, what is a better option for investment? Let us do a comparison of the two.

Gold CoinGold Jewelry

AvailabilityGold Coins usually come in standard weights like 1 gm, 5gm, 10gm, 100 gm. etc.Jewelry can be made according to your weight preference.

PurityMost gold coins are 24 karat 995 purity. 2 gram gold coins can be either 22k or 24 k.Gold Jewelry could be anywhere from 18k-22k.

WastageDue to the standard design, gold wastage is less.Depends upon the intricacy of the designs. Wastage is more than gold coins and bars.

Breaking Charges(charges incurred during melting and making a new design)Even when gold coins are converted into jewelry pieces, the breaking charges are lesser than gold jewelry.When gold ornaments are melted to create a new ornament, the breaking charges are more than gold coins.

Resale ValueDue to lesser wastage, breaking and making charges and highest purity, the resale value of gold coins is higher than gold ornaments.Due to more wastage, breaking and making charges, wear and tear, depending upon the purity of the particular item, resale value is lesser than gold coins.

AffordabilityGold coins can be as low weight as 1 gm or 2 gms. Thus, it is affordable for more people.Gold Jewelry has more weight and requires a bigger investment.

Conclusion

From a purely financial investment perspective, gold coins carry more merit than gold jewelry. Although the owner of gold ornaments can proudly wear their possession, it isn't the ideal investment choice. The purchase price of gold ornaments increases due the manufacturing cost and meltdown value. It might warrant additional costs such as renting a safety locker for the safekeeping of the physical gold.