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In Noida’s Sector 18 market, the answer is playing out in real time. Outside a nondescript ‘Cash for Gold’ outlet, Rekha Verma (name changed on request), a middle-aged homemaker from Ghaziabad, clutches a tiny velvet pouch. Inside: a pair of 16-gram, 22-karat earrings. She planned to exchange them for a trendier necklace but, after crunching the numbers, opted to sell instead. “I thought I could swap them, but after all the deductions, cash made more sense,” she laughs. “I’ll buy some jewellery but invest the rest elsewhere.”
Rekha isn’t alone. The man behind the counter, quick with his calculator, sees six to seven such customers daily. “People are rethinking gold,” he says. His outlet charges a 3-10% commission, far less than the 4-5% market price cut and 20-25% making charge loss at brand stores.
The game-changers
ICRA expects domestic gold jewellery consumption to rise 14-18% by value in 2024-25, despite weak volumes. In 2023-24, growth hit 18%, driven by high prices rather than demand. Gold remains costly but is viewed as a hedge against inflation and currency depreciation.Reports by Redseer and PwC peg India’s jewellery market at $67 billion, set to hit $115-125 billion by 2028, propelled by rising incomes and shifting consumer trends. Traditional shoppers, especially women, now prefer lightweight pieces or digital gold over bulky bridal sets. Yet, despite the market’s growth, resale returns tell a different story.
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What happens on selling gold
The market price is different from the retail price you may have paid for your jewellery due to additional costs like manufacturing, design, and retailer markup.Popular in Wealth
When exchanging or selling, there are a few deductions. Let’s crunch the numbers. For 16 grams of 22-karat gold jewellery, at the 9 March 2025 buying rate of Rs.8,000 a gram, the gross gold value is Rs.1,28,000.
See the math
Making charges loss (10-25%): This portion of your original purchase (say 15% of Rs.1,28,000, or Rs.19,200) is never recovered. Market price deduction (4-5%): Assume a 5% deduction off Rs.1,28,000 or Rs.6,400.GST loss (3%): You paid 3% GST (`3,840) when you originally bought it, which is non-refundable.
After deductions, the final value is Rs.98,560 from the initial Rs.1,28,000.
For most customers, this means they are clawing back 25-40% of the notional market value, depending on the specifics. And if the jewellery was older or less pure, the yield could drop more. Add to it the Short Term Capital Gains Tax and the Long Term Capital Gains Tax, which most sellers don’t pay upfront, and it is declared during income tax filing.
With Rs.98,560 left, you can buy 12.32 grams of 22-karat gold (at Rs.8,000 per gram) or 15.16 grams of 18-karat gold (at Rs.6,500 per gram).
In simple terms, if you started with 16 grams of jewellery, you may walk away with just about 12 grams of 22-karat gold or 15 grams of 18-karat gold after factoring in all deductions. But again, when you buy a piece of jewellery, you must pay making charges (10-25%) and GST (3%). So, either you spend about 18-25% more or settle for a jewellery with far less grams. So, given this breakup, the wiser choice to make is to invest in bars and coins.
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“Our 99.99% pure gold coins and bars offer 100% buyback,” says a spokesperson for MMTC-PAMP, an internationally recognised industry leader in precious metals. “Jewellery includes alloys and making charges, lowering resale value, unlike coins and bars.”
Gold’s decade-long climb
Average annual price of gold in ` per 10 grams of 24-karat.
More than just maths
Parag Shah, CEO of Kisna Diamond and Gold Jewellery, says, “Tier 2/3 markets are driving strong demand for gold jewellery, fuelled by rising aspirations and a preference for trendy designs.” A jewellery store owner in South Delhi’s Lajpat Nagar sums it up: “Customers want to buy, not exchange. They sell old pieces and buy trendier designs.”Many Indians see gold as a long-term asset, but rising costs push them to sell rather than exchange. Instead of just trading gold, they are rebalancing portfolios, investing, funding education, or even travelling.
The MMTC-PAMP spokesperson notes a trend: “Short-term investors trade on price shifts, while long-term investors build wealth, often repurposing gold into jewellery instead of selling.”
PwC notes that while Indians prefer leveraging gold for loans over selling, the formal gold loan market—37% of Rs.7.1 lakh crore—offers growing opportunities.
With soaring gold prices, Indians are rethinking gold—not just for wealth preservation but as a liquidity tool, opting for newer, smaller pieces. Yet, the numbers don’t lie: selling old gold comes at a cost, often far steeper than imagined. Remember, gold is getting pricier, not heavier.
