Gold at Rs 11,925 per gram ahead of Diwali: Should you buy & in what form?

Gold prices hit record highs ahead of Diwali. Explore expert tips on the best gold investment options, physical gold, jewellery, digital gold or ETFs - for maximum returns.

As gold prices touch fresh highs in India, investors are once again drawn to the yellow metal for both festive and financial reasons. According to data from the India Bullion and Jewellers Association (IBJA), 24-karat gold stood at around Rs 11,925 per gram on Tuesday, continuing its upward rally amid global economic uncertainty and rising geopolitical tensions.

 

With Diwali and Dhanteras around the corner, the question for many savers is not whether to invest in gold, but how. Should you buy physical gold, digital gold, or gold exchange-traded funds (ETFs)? Experts weigh in.

 

Physical gold vs jewellery

 

Physical gold, in bars or coins, remains a better investment than jewellery primarily because it retains purity and has fewer add-on costs.

 

Advantages: “Physical gold is typically 24-karat and trades closer to market prices, which makes resale easier and often more profitable,” explains Aditya Agarwal, co-founder of Wealthy.in.

 

Drawbacks: Jewellery, however, carries 8–25 per cent making charges and wastage fees. “Buyers lose around 10–15 per cent of value at resale,” says Arjun Guha Thakurta, executive director, Anand Rathi Wealth Ltd.

 

Emotional appeal: “Jewellery is sentimental and festive, not strategic,” adds Ajay Lakhotia, founder and CEO of StockGro.  ALSO READ| Gold nears $4,000 an ounce for first time ever: What's driving the rally? 

Digital gold vs ETFs: liquidity and regulation

 

Modern investors are increasingly opting for paper gold through digital gold platforms and ETFs. Both eliminate storage hassles but differ sharply in transparency and regulation.

 

Digital gold: Allows micro-investments (from Rs 1) and offers insured vault storage, making it suitable for beginners. But experts warn that it attracts 3 per cent GST, lacks SEBI regulation, and carries wider buy-sell spreads.

 

Gold ETFs: “ETFs are regulated, liquid, and cost-efficient, with expense ratios between 0.2 per cent and 1 per cent and no GST at purchase,” notes Thakurta. Both digital gold and ETFs attract a 20 per cent long-term capital gains tax with indexation after three years, adds Agarwal.

 

During 2025’s market swings, one investor who switched from digital gold to ETFs avoided GST losses and earned higher returns, Agarwal says.

 

What experts recommend this Diwali

 

For middle-class families, experts suggest limiting gold exposure to 5–10 per cent of the total portfolio.

 

Best pick: ETFs offer regulated, transparent, and liquid access to gold as a hedge against inflation.

 

Festive buys: “Buy minimal jewellery for tradition, but channel the rest into ETFs or sovereign gold bonds for real returns,” says Agarwal.

 

All three experts agree that while gold remains a symbol of wealth and security, the form you choose determines whether it serves your emotions or your financial goals.