Jewellery, coins, ETFs and digital gold compared

There are four common ways to own gold in India, and they differ far more in what it costs to get in and out than in what the gold does. One of them has been discontinued for new buyers. One of them the market regulator has publicly warned about. Both facts are recent enough that most comparison articles have not caught up.

Jewellery

The most common and the most expensive. You pay for the metal, then making charges, hallmarking and GST on top, and at resale you are paid for the metal alone.

A 10 gram 22K chain at today’s rate holds ₹1,40,593 of gold and bills at roughly ₹1,62,234 with making charges at 12%. The ₹21,641 difference is not recoverable. That is the price of owning something wearable rather than owning metal, which is a perfectly good reason to buy it. It is a poor reason to call it an investment.

Coins and bars

The same physical metal without the design premium. Making charges on coins are far lower than on jewellery, commonly a few percent, and hallmarked coins from a recognised source resell more easily than a worn chain because purity is not in question.

A 10 gram 24K coin holds ₹1,53,486 of gold and might bill around ₹1,65,995 at a 5% making charge, a gap of ₹12,509. Roughly a third of what the chain costs you to acquire.

Against that, you take on storage and security, and a bank locker has its own annual cost.

Gold ETFs

A mutual fund scheme backed by physical gold held with a custodian, with units traded on the exchange like a share. You need a demat account. There are no making charges, no storage problem and no purity question, and you can sell part of a holding, which you cannot do with a chain.

The costs are an annual expense ratio, brokerage, and a small tracking difference against the metal price. For anyone buying gold as an asset rather than an object, this is usually the cheapest route in and out.

Sovereign Gold Bonds, and why they stopped

SGBs were government securities denominated in grams of gold. They paid 2.5% a year on top of the gold price movement, ran for eight years, and allowed early exit after five. Crucially, capital gains at maturity were exempt from tax for the original subscriber.

That combination, the gold price plus an interest coupon plus a tax exemption, made them the best-value way to hold gold in India for most people. It also made them expensive for the government to run, and no new tranches are being issued. There is no issuance calendar for the current financial year.

The full mechanics, and what one real tranche actually paid its holders, are in the Sovereign Gold Bond guide.

Bonds already issued continue normally. They still pay their coupon and still mature on schedule, and several tranches reach their early-redemption windows each year. You can also buy existing SGBs from other holders on the exchange, but with a catch worth knowing: the maturity tax exemption applies to the original subscriber. Buy on the secondary market and your gains at maturity are taxable.

Digital gold, and what SEBI said

Digital gold lets you buy fractional quantities through an app, with a provider holding metal against your balance. The convenience is real. The regulatory position is the problem.

On 8 November 2025 SEBI cautioned investors that digital gold and e-gold products offered by online platforms operate outside its regulatory purview. They are not recognised as securities or as regulated commodity derivatives, and SEBI was explicit that no investor protection mechanism applicable in the securities market covers them.

That does not mean any particular provider is unsound. It means that if one fails, the recourse available to you is not the recourse you would have with a regulated product. Weigh that against the convenience rather than assuming an app is equivalent to an exchange-traded fund.

The tax difference that surprises people

The same metal is taxed on different timelines depending on the wrapper it sits in.

Physical gold needs twice the holding period of a gold ETF to qualify for long-term treatment. Both then pay 12.5% without indexation. If you are likely to sell inside two years, the wrapper you chose at the start decides whether the gain is taxed at 12.5% or at your slab rate, which can be 30%.

SGB interest, separately, is taxable as income from other sources for everyone, regardless of how long the bond is held.

A prior question is how much gold to hold at all. Gold versus equity sets out what 40 years of Indian data actually shows.

Choosing

• Buying something to wear or to give. Jewellery. Just price the making charges properly first with the calculator, and treat the charges as spent money rather than stored value.
• Wanting metal in hand. Hallmarked coins or bars. Lower charges than jewellery and easier to resell.
• Buying gold as an asset. A gold ETF, for the low entry and exit cost, divisibility and the shorter route to long-term tax treatment.
• Already holding SGBs. Check your tranche’s redemption dates, and remember the maturity exemption is worth keeping if you were the original subscriber.

This is general information rather than investment advice, and we are not licensed advisers. What is right depends on your circumstances, your horizon and your tax position, so take advice before committing a meaningful sum.

One thing physical gold can do that the others cannot: it can be pledged for a loan without being sold. The gold loan guide covers how much you can raise against it.

Whichever route you take, the metal price underneath is the same. Today’s benchmark is on the home page, and how it is arrived at explains what moves it.