Gold is considered to be one comparable investment after equity and real estate.
But not so in India. If you buy gold jewellery from any jeweller in India, and try to sell it at any other shop as soon as you bought it, you will find the value of your investment reduced significantly.
Almost all jewellers follow very secretive and manipulative practices while deciding rates for buying and selling the same gold. There is no transparency. Even some of the small-time jewellers can’t explain the huge discrepancy in their own buying and selling rates.
There is no single reference to benchmark rates. There are a lot of confusions about 999 or 916 or Hallmark etc and jewellers misinterpret this conveniently to manipulate prices.
Gold is a favorite avenue of investment by all classes of people in India. But most of them are unaware of the impossible-to-understand valuation methods of jewellers. Also, a large part of gold jewelry is used in gifting, where the receiver generally does not sell it for decades. Due to both these factors, the manipulative practices of jewellers are not exposed.
Add to this, the absence of any controlling authority allows these rampant malpractices to continue unchecked.
Until some disciplinary steps are taken to stop such fraudulent practices, gullible Indians will continue to lose their hard-earned money in the hope of increasing it through gold investment.