Gold vs diamonds: Which Diwali investment is likely to give better returns

Gold is a stable asset and it symbolises wealth, and prosperity. Diamonds' appeal is in rarity and uniqueness

Many Indians make investments to mark Diwali, with jewellery as a popular choice. Gold has been the favourite for generations, but diamonds have emerged as an alternative in recent years.

 

“From an investment standpoint, gold clearly outshines diamonds. Its liquidity is unmatched, as selling gold or securing a gold loan is a straightforward process, while banks or NBFC typically do not offer loans against diamonds. Also, gold pricing is transparent and not given to vagaries of assessment or uniqueness of the cut, which a diamond typically faces,” said Sumit Sharma, founder of Radian Finserv.

 

“With the rising popularity of lab-grown diamonds, traditional diamonds face increasing competition. Therefore, while there are pros and cons with anything, investing in gold bullion emerges as a more reliable option for those seeking both stability and flexibility in their investment strategy,” said Sharma.

 

Making the right choice

 

Investment advisors suggest considering several factors before making a decision:

 

Budget considerations

 

Gold jewellery offers more flexibility with smaller investments.

 

Diamond jewellery typically requires a higher initial investment.

 

Resale value

 

Gold has better liquidity and standardised pricing.

 

Diamond resale value can vary significantly based on market conditions and stone quality.

 

Long-term appreciation

 

Gold prices are more predictable.

 

Quality diamonds have shown strong appreciation over decades.

 

Gold remains the top choice for weddings, cherished for its elegance and cultural importance. Diamonds are popular for everyday wear and social events, offering a sleek, modern look that appeals to those seeking both style and lasting value.

 

Points to keep in mind when going for gold or diamond shopping:

 

For those specifically looking at Diwali purchases, experts recommend:

 

Buying from reputed jewellers with proper certification.

 

Considering hallmarked gold jewellery only.

 

Opting for certified diamonds with detailed documentation.

 

Understanding the making charges and their impact on overall investment value.