Perspective On Gold Shifts With The Times As Tastes, Trends Change

Magnificent wedding necklaces, once viewed with sparkling eyes, may cause Gen Z to squirm due to their 'extra' design. With jewellery preferences evolving, the outlook on the yellow metal, both as an asset and an investment, is changing.

“A 10-15% allocation of gold is prudent to have in your portfolio, excluding jewellery," said Harshvardhan Roongta, co-founder of Roongta Securities. This implies that the allocation should consist of gold assets that one would not hesitate to liquidate, such as gold bars or ETFs.

Gold has held its place of significance through generations, and more than just a commodity, the yellow metal has a certain emotional appeal as well.

"There is a bigger segment in India that is not familiar with the equity markets. Gold becomes their investment," said Rajiv Popley, managing director of Popley Group.

This emotional appeal specifically applies to jewellery and the resale value of jewellery may not be much. Jewelry also tends to receive very little appreciation, as one is paying for the beauty of that specific design.

"One is paying for craftsmanship. It can go up to 4–25% of the product value. In India, the unique selling point of jewellery is unique; there are no multiple pieces or mass production," said Popley.

India has always prided itself on making unique gold jewellry. The workmanship that goes into creating fusion styles and designs is the unique selling point. There are several regional and cultural styles from across the nation that contribute to the diverse designs.

Goldsmiths, who have traditionally worked in this field, now face greater challenges as the industry is constantly seeking new talent.

"The next generation of goldsmiths may not be as comfortable or may be interested in pursuing other things like education,” said Popley.

To add to this, the younger generation does not share the preferences of the previous generation. With love for white gold and customised minimalistic jewellery picking up, the market is changing as demand evolves.

"They prefer white gold and fancier things like lab-grown diamonds. They would want to spend towards experiences and travel," said Roongta.

Along with the demand for customised and subtle pieces growing, the trend of treating oneself to quality jewellery is on the rise.

"Buying good designer pieces for oneself that they can wear when they prefer. They want it for their use for themselves and not always keep it for the next generation," said Roongta.

There are different types of jewellery available, and there are simple daily wears that people are ready to invest in. According to Popley, this is a sign of the market maturing.

The best way to invest in gold is to buy sovereign gold bonds, according to Roongta. One thing to remember when buying SGBs is the fact that the tax exemptions are only available when they are redeemed after maturity.

Another way of investing in gold is to invest in a gold fund or a gold ETF, according to Roongta.

When buying or trading physical gold, it's important to ensure that every transaction is documented. This would be useful for taxation purposes and for future references.

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