‘Buying gold right now is a little risky’: Investment banker explains why it’s more than just high prices

Buying gold might not be the safest bet at the moment, according to investment banker Sarthak Ahuja, who recently shared his concerns in a LinkedIn post. He cautioned that the risk goes beyond just the soaring price of the yellow metal.

“Buying gold right now is a little risky in my view, and it’s not just about the high price,” Ahuja wrote. “Gold jewellery sales dropped by over 60% last month — the sharpest decline in the last five years.”

He noted that jewellers are attempting to attract buyers by offering discounts on making charges, but the demand remains sluggish as gold prices hover around ₹1 lakh per 10 grams. “Prices have become so unsustainable that many jewellers are slashing production by half,” he added.


Ahuja also warned that selling gold could be equally unprofitable in the current market. “If you try to sell your gold to a jeweller today, you’ll likely be offered much less than the prevailing market rate due to the high level of unsold inventory,” he said.

He identified three key trends emerging from the current gold market scenario:

1. Shift to lower karat jewellery: Jewellers are increasingly pushing 14-karat gold, and some are even lobbying the Bureau of Indian Standards (BIS) to introduce hallmarking for 9-karat jewellery to make it more affordable for customers.
   
   
2. Silver’s growing appeal: Unlike gold, silver is facing a supply deficit for the fifth year in a row, primarily due to industrial demand — especially from the electric vehicle (EV) sector. This, Ahuja believes, could drive silver prices higher in the near future.
   
   
3. Rise of artificial jewellery: With real gold becoming increasingly unaffordable, D2C (direct-to-consumer) brands offering gold-plated or imitation jewellery with unique designs are likely to see a surge in demand. “While competition is high, I believe there’s still a lot of untapped potential in this space,” Ahuja said.
   
   

Meanwhile, gold prices dipped by ₹200 in the national capital on Tuesday, with 99.9% pure gold falling to ₹99,370 per 10 grams from ₹99,570 on Monday. Gold of 99.5% purity dropped to ₹98,800 from the previous ₹99,000 per 10 grams (inclusive of taxes).

Silver also witnessed a sharp correction, plunging ₹3,000 to ₹1,12,000 per kg on Tuesday, after touching a record high of ₹1,15,000 per kg a day earlier.