Editor’s Note
This article highlights the significant surge in gold prices during India’s festive season, a period traditionally marked by high consumer demand. The sharp increase, exceeding 50 percent, is impacting purchasing enthusiasm ahead of Diwali.
Amidst the festive season in India, the sharp and continuous rise in gold prices has created a stir among consumers. Diwali is traditionally considered an auspicious time to buy gold. However, this year, the enthusiasm for purchases has dampened somewhat due to a surge of over 50 percent in gold prices. On Friday, the price of 24-carat gold on the Tanishq website was ₹12,273 per 10 grams.
Gold prices have gained 2.2 percent this week. On Wednesday, gold reached a new record level of $4,059.05 per ounce. According to a Reuters report, gold has risen by nearly 52 percent so far in 2025. The reasons for this are strong demand, geopolitical uncertainty, and concerns about an economic slowdown.
Gold has always been considered a safe investment in volatile conditions. Expectations of interest rate cuts in the US and tariff-related concerns are also attracting investors towards gold. At such a time, consumers who are thinking of buying gold in the near future can choose digital or physical gold according to their needs, budget, and investment objectives.
Digital gold allows you to buy, sell, and store gold online securely. You can start investing with as little as ₹1. The purchased gold is securely stored by the service provider. Many jewelry brands and investment platforms offer this facility.
Under this scheme, the buyer gets 24-carat pure gold, the price of which is determined in real-time. It is suitable for both short-term and long-term investment.
The same tax rules apply to digital gold as to physical gold. If you sell digital gold within 12 months of purchase, it is considered a short-term capital gain and tax is levied according to your income tax slab rate. If digital gold is held for 12 months or more, a tax of 12.5 percent is payable on the profit.
Digital gold can be purchased through mobile wallets, banking apps, or jewelry websites. Additionally, investment can also be made through Gold ETFs. Like physical gold, a 3 percent GST is also payable when buying digital gold.
Physical gold is a traditional and tangible medium of investment. It includes gold coins, biscuits, and jewelry. It is most commonly used for personal or religious occasions such as weddings.
A 3 percent GST is payable at the time of purchase. If someone buys jewelry, they also have to pay a making charge, which typically ranges from 10 percent to 20 percent.
These additional costs make physical gold more expensive compared to digital gold. That is, when you buy gold jewelry, you pay more than the actual value of the gold. Therefore, physical gold is not considered as beneficial for short-term investment.