This Akshaya Tritiya, should you invest in gold despite red-hot prices?

Akshaya Tritiya, also known as Akha Teej, is one of the most sacred and prosperous festivals celebrated by the Hindu community across India. In 2025, this auspicious day will be observed on Wednesday, April 30.

Falling on the third lunar day (Tritiya) of the Shukla Paksha in the month of Vaishakha, according to the Hindu calendar, Akshaya Tritiya holds deep spiritual significance. The word Akshaya means “eternal” or “never diminishing” while Tritiya signifies the “third” day — together symbolising everlasting prosperity, success and abundance.

While individuals can make investment decisions based on sentiments, it is also important to keep in mind the basic principles of investment. After all, any investment is with a goal to achieve a particular financial objective.

Traditionally, it is believed that any virtuous act, investment or new beginning undertaken on this day yields enduring benefits and is blessed with growth. As such, Akshaya Tritiya is considered highly favourable for starting new ventures, making investments and performing charitable deeds.

Buying gold

One of the most beloved customs associated with the day is the purchase of gold, which is regarded as a token of wealth and security.

Over time, this practice has become a hallmark of the celebration, with families across India viewing Akshaya Tritiya as the ideal occasion to buy gold, make significant financial decisions or embark on new journeys in life or business.

Also read | Akshaya Tritiya spurs retail gold rush amid global market jitters

While individuals can make investment decisions based on sentiments, it is also important to keep in mind the basic principles of investment. After all, any investment is with a goal to achieve a particular financial objective.

Investment decisions should also be based on return expectation, investment period, level of risk bearing capacity and so on. So, it is better to remember the following before you buy gold jewellery during Akshaya Tritiya this year.

Asset allocation plan

Asset allocation involves dividing an investment portfolio among different asset categories such as stocks, bonds, real estate, gold, silver and cash.

The process of determining which mix of assets to hold in your portfolio is a very personal one. The asset allocation that works best for you at any given point in your life will depend largely on your time horizon and your ability to tolerate risk.

Be guided by the asset allocation plan adopted by you before you commit further investment in gold related assets.

Volatility of gold prices

One must understand that the price of gold does not move at any uniform rate and there are ups and downs. Return on gold investment varies over the years.

See the following chart to know how the average annual price of 24 karat gold moved during the last 10 years.

Average annual price of gold (24 karat, per 10 grams)

(Currently, the gold price is hovering around Rs 98,000.)

Negative return

There are some years in which gold has given negative returns. Gold’s drawdowns reveal its inherent risks also.

While it may serve as a hedge during crises, it is not a risk-free asset as it is generally believed. Between 1980 and 2000, gold lost 61.3 per cent of its value over 20.5 years.

Also remember that unlike equities that often recover within years, gold’s recovery periods can span decades. This extended timeline makes it challenging for short-term investors.

Do remember that investment in gold ornaments does not equal to investment in gold. When you buy gold jewellery you pay not only for the gold content but also for making charges, wastages and taxes.

Wastage in gold

While one can understand the significance of making charges as any production involves labour charges and taxes levied by the government, it is beyond one’s comprehension to understand the levy as ‘wastages’. But this is the practice of all jewellery shop owners.

Let us see an example. If you buy a gold chain that weighs 10 grams of gold and if the wastage charge is 5 per cent, then you will pay for 10.5 gram but the chain you buy will contain only 10 grams of gold.

Also read | Gold prices are sparkling; read this before you rush to buy some

Hence it is important to understand that the entire outflow of funds does not become investment in gold. Though gold may not depreciate due to usage like a vehicle or any machinery, its value may come down where there is unfavourable market, that is lesser demand than supply.

Publicity by shops

A big publicity has been initiated by jewellery shops as usual. There are various offers available. One may have to study in between the lines to understand the actual offers.

Offers are generally on reduced wastage or making charges. Some shops offer a lesser price per gram of gold (than the prevailing market price).

There are other pre-booking offers also, so that rush on the particular day of Akshaya Tritiya can be avoided. There are also some offers to guarantee the lowest price of gold during this booking period.

Quality guarantee

The Bureau of Indian Standards (BIS) hallmark certifies the purity and fineness of the gold in India. BIS hallmarking is mandatory for gold jewellery sold in India. It contains the BIS logo, the purity or fineness symbol and a six-digit alphanumeric code (HUID).

(The views expressed here are the author's, and do not constitute investment advice.)