Cost of tradition: Dhanteras gold an investment mirage?

Physical gold carry significant embedded costs like making charge, GST, reducing net return

- Shipra Singh

The glitter of gold is hard to ignore this year, especially during Dhanteras.

From around ₹50,700 per 10 grams in 2020 to ₹1.24 lakh as of 9 October 2025, gold has delivered an impressive 21% annualised return over the past five years. This growth not only comfortably outpaces average inflation of 6-7% but even beats equity, with the Nifty 50 having compounded at about 17.5% annually over the same period.

But if you're riding this rally through gold coins or jewellery, your net returns may leave you disappointed as significant embedded costs make these the lowest-yielding forms of the metal.

"Physical gold coins are seeing heightened interest amidst the ongoing rally in gold prices. However, physical bullion carries making charges, storage costs, quality concerns, and other frictions that erode returns," explains Dev Ashish, a Sebi-registered investment advisor and founder of StableInvestor.com.

Many households accumulate gold gradually, buying 1, 2, or 5 gram coins each Dhanteras, blending a festive ritual with a practical wealth-building exercise. The catch, however, is that when you buy gold in coin form, you don't fully capture its on-paper returns.

Coins to jewellery: a costly bet

The gap between market-price appreciation and the value you actually realise can be significant as the value of accumulated coins can only be realised by either selling them for cash or using them to make jewellery. Both routes eat into your returns.