Showing posts with label finance. Show all posts
Showing posts with label finance. Show all posts

Thursday, August 6, 2026

Gold Isn't just an Investment. It's Something Else.

(11 mins read)


Every year around Diwali, someone in the family asks the same question: should we buy gold now, or wait? This year the question comes loaded. Gold just had one of its best runs in decades. Silver showrooms have waiting lists. And half your WhatsApp forwards suddenly sound like they were written by a bullion trader.

I recently listened to a market veteran - someone who's tracked commodities for over 20 years - break this down in a long, refreshingly non-hyped conversation. No "buy now or regret forever" panic, just someone explaining why the metal your grandmother hoarded is suddenly back in every headline. I found it genuinely useful, so I'm writing it down here - partly for you, partly as a note to my future self before the next Diwali gold debate.

Gold isn't really an "investment" in India — it's a currency

Here's the reframe that changes how the rest of this makes sense: gold in India was never just an asset class sitting next to stocks and mutual funds. It's older than the stock market itself. Long before banks were common in rural India, gold was the bank — something you could hold, hide, pass down, and convert to cash almost anywhere, anytime.

That's why gold in Indian households carries weight that real estate or shares never will. It shows up at weddings, gets passed from mother to daughter, and functions as a kind of family insurance policy. Treating it purely as "an investment" misses half the point. It's a store of value with an emotional and cultural layer built in - which is exactly why price swings in gold generate so much more anxiety at home than a dip in the Nifty ever does.

So why is gold suddenly this expensive?

A few things are converging at once, and none of them are mysterious once you name them.

Interest rates. Gold pays you nothing while it sits in your locker; no interest, no dividend. That's normally its biggest weakness. But when interest rates fall, that weakness stops mattering, because bank deposits and bonds aren't paying much either. Cheap money makes an asset that pays zero interest look a lot more attractive by comparison. As rate cuts continue globally, that tailwind for gold isn't going away soon.

Central banks, not Diwali shoppers. This one surprises people: Indian festive-season buying has almost no effect on the global gold price. Jewellers stock up for the wedding season (November–December) well in advance, so a spike in shop footfall in October doesn't move the needle. The real price-setters are central banks - China's in particular - buying gold in bulk as a reserve asset. India is the world's second-largest gold consumer, having lost the top spot to China roughly a decade ago, but consumer demand and price-setting are two very different things.

A once-in-a-generation flight to safety. The expert's framing here stuck with me: this is the first time since World War II that we're seeing this kind of global scramble for safe-haven assets. Shifting alliances and geopolitical uncertainty tend to push investors toward things that don't depend on any single government staying stable. Gold is the oldest answer to that anxiety.

And yes, some plain old FOMO. The last few weeks have seen a surge of gold and silver buying that has nothing to do with fundamentals and everything to do with headlines. Showrooms that were empty a month ago are suddenly overwhelmed. That's a sentiment story, not a value story - and it's worth being honest with yourself about which one is driving your own urge to buy.

A quick reality check on the numbers: the conversation pegged a rough target of around ₹1,30,000–1,35,000 per 10 grams from a base near ₹1,20,000 - with a caution that a 5–10% correction wouldn't be shocking along the way. As of early August 2026, 22-karat gold in India is already trading close to ₹1,32,000 per 10 grams, and 24-karat near ₹1,44,000. In other words, that "target" has essentially arrived. Whether it holds, corrects, or keeps running from here is genuinely uncertain - nobody, including seasoned commodity watchers, is claiming otherwise.

Silver: the quieter rally that's actually louder

If gold had a good year, silver had an extraordinary one. It moved from roughly $22 to $50 an ounce over about 14 months - more than doubling - and some market watchers expect it could double again within the next year and a half. As of now, global silver is trading close to $57–58 an ounce, and in India it's crossed ₹2.3 lakh per kilogram, a level that would have sounded absurd just a couple of years ago.

Part of this is the same safe-haven story as gold. But silver has something gold doesn't: it's an industrial metal as much as a monetary one. Roughly a quarter of global silver demand now comes from solar panel manufacturing alone, and there's no real substitute for it in that chemistry. Add electronics, where silver is a cheaper conductor than gold, and you get a metal with genuine, unavoidable industrial demand layered on top of investment demand.

There's a neat way to sanity-check whether gold or silver looks "expensive" relative to the other: the gold-to-silver ratio, how many kilos (or ounces) of silver it takes to buy one of gold. Historically, that ratio has hovered around 60–70. When it climbs well above that, silver looks cheap relative to gold; when it compresses, the gap has narrowed. It's not a perfect signal, but it's a useful gut-check before you decide which metal to add to.

Worth noting: silver is meaningfully more volatile than gold. Several market veterans have reportedly shifted personal buying from gold bars to silver in the last couple of years, chasing the sharper upside - but that trade only makes sense if your own risk tolerance can handle the sharper downside too.

Dubai vs India: the myth, and why the facts just changed

"Gold is cheaper in Dubai" is one of those beliefs that used to be simply true - and isn't anymore, at least not automatically.

For years, India's gold import duty sat around 15%, then got cut sharply to roughly 5–6% in 2024, which meant the India–Dubai price gap shrank a lot and made a special trip abroad less worth it once you counted flights and hotels. That's since reversed. In May 2026, the government raised the effective import duty back up to around 15% — nearly doubling it overnight — largely to curb gold and silver imports that were putting pressure on the trade deficit and the rupee. So the calculus that made "just buy it in India" the easy answer for the last couple of years is genuinely more complicated again.

That said, a few things haven't changed and are worth knowing regardless of where duties sit:

  • Purity is usually the same. Both Indian and Dubai gold jewellery are typically 22-karat (916 purity). Any difference in colour comes down to the alloy mix used, not the gold content.
  • India's hallmarking system is a real advantage. Strict BIS hallmarking rules mean every piece of hallmarked jewellery is traceable, which has cut down on the old scam of quietly diluting purity. That's a layer of buyer protection Dubai purchases don't automatically come with.
  • Making charges cut the other way. Indian jewellery, especially handmade and intricately designed pieces, often carries making charges of 7–25%. Dubai's tend to run lower, around 7–8%, partly because more of it is mass-produced. If you exchange jewellery often, these charges quietly eat into your money each time.

Add it up - import duty, GST, making charges, and the cost of the trip itself - and "just fly to Dubai for cheaper gold" is no longer the automatic win it once was. It genuinely depends on current duty levels, what you're buying, and whether you're buying for design or for value storage.

Karats, decoded (because nobody explains this well)

This trips up more people than it should, so here's the plain version:

  • 24 karat (999 or 995 purity) is essentially pure gold. It's what you'll find in gold bars, coins, and digital gold.
  • 22 karat (916 purity) means 916 out of 1,000 parts are gold, the rest is alloy (usually copper or zinc). This is the default for jewellery in India, because pure 24K gold is too soft to hold its shape under daily wear.
  • 18 karat (750 purity) is 75% gold. It's more durable and often cheaper to make, but demand is lower in India, so many jewellers won't stock it — you may need to special-order it.

The short version: if you're buying for value storage, higher purity (24K) makes sense. If you're buying jewellery to actually wear, 22K is the practical default, and that's exactly why it dominates Indian showrooms.

The many ways to actually buy gold today

Physical jewellery is just one option, and often not the most efficient one if your goal is investment rather than adornment.

  • Physical gold (bars, coins) — straightforward, but comes with making charges, storage risk, and the hassle of verifying purity when you eventually sell.
  • Gold ETFs — essentially a fund that buys and stores gold for you. You get exposure without physical storage headaches, and the fund handles GST at the point of purchase rather than you paying it directly each time. There's a small fund management fee, but it's usually lower than the total cost of buying and later reselling physical gold. The simplest filter here: pick the fund with the lowest expense ratio and highest trading liquidity.
  • Digital gold — buy fractional gold instantly through apps like Google Pay or PhonePe. GST still applies, but there's no making charge and no locker to worry about. It's become hugely popular with younger, first-time buyers precisely because of that convenience.
  • Sovereign Gold Bonds (SGBs) — these used to be arguably the best structural option: an extra ~2.5% annual interest on top of gold's price gains, and zero tax if held to maturity (5 years). The RBI has stopped issuing new SGBs, reportedly because the outstanding bonds weren't fully backed by physical gold reserves — a liquidity concern that led to the scheme being wound down. Existing bonds can still be bought and sold in the secondary market, just not freshly issued.
  • Hybrid funds — a newer, less obvious option: funds that mix equities (often ~75%), some debt, and a slice of commodities (~15%). You get equity-market upside with a built-in commodity hedge, often taxed more favourably than a pure gold fund.

If you're optimising for pure convenience and cost, digital gold or a low-fee ETF beats a trip to the jeweller most of the time. If you're buying because you actually want to wear it, that's a different (and entirely valid) decision - just don't confuse the two goals when you're comparing prices.

Beyond gold: where the next decade of commodity demand is heading

This is the part of the conversation I found most useful, because it's less about gold's next 10% move and more about where structural demand is actually building.

Crude oil remains the single largest traded commodity globally simply because it's used every day, everywhere. Beyond that, India allows trading in roughly 70–75 approved commodities, spanning industrial metals (aluminium, copper, zinc) and agricultural products (wheat, sugar, soybean).

The EV transition is reshaping metal demand. Aluminium's lightness makes it valuable for vehicle bodies, copper is increasingly critical for wiring and electrical components (EVs use far more copper than combustion-engine cars), and nickel is gaining ground over lithium in some battery chemistries for being more stable. Lithium itself matters today because of EV batteries, but there's real skepticism about whether EVs remain the dominant technology long-term — some see hydrogen-powered vehicles as the more durable future, though commercially viable, sustainable hydrogen production is likely still decades away.

The sensible way to play this uncertainty isn't to bet on one winner — it's to spread across the supply chain. That could mean a mix of EV manufacturers, battery makers, lithium miners, and battery-recycling companies (a market that's about to matter a lot, as batteries from the current EV wave start expiring in a few years). Spreading exposure across mining, production, and recycling reduces your dependence on any single technology winning outright.

A cautionary example: palladium. It rode the internal-combustion-engine wave for years thanks to catalytic converters, but demand has cooled as emissions standards evolve and EV adoption grows. It's a useful reminder that commodity tips based on where demand used to be can age badly — the smarter lens is where demand is heading, not where it's been.

On China exposure specifically: many rare-earth and industrial metals are sourced from regions under Chinese control, which makes some investors wary of unpredictable policy shifts. One workaround worth knowing about is investing via the Hong Kong exchange, which operates under a more autonomous legal framework — accessible to Indian investors through routes like the Liberalised Remittance Scheme (LRS).

So how much of your portfolio should actually be in this stuff?

A rough, sensible range that came up repeatedly: 15–20% of a portfolio in commodities and commodity-related stocks, adjusted for your age and risk appetite. Younger investors with a longer runway and higher risk tolerance can lean toward the upper end (and can afford silver's sharper swings); more conservative or older investors might sit at 10–15%, weighted more toward gold's relative stability.

You don't have to choose only between physical metal and pure commodity funds, either — stocks in commodity-linked companies (think Hindalco or Hindustan Zinc) give you exposure to the underlying commodity plus the added variable of how well that company is actually run.

Where I land on this

None of this is a call to rush out and buy gold bars this week. If anything, the more interesting takeaway is the opposite: the "safe" asset is having a genuinely unusual moment, driven by forces - central bank buying, a historic flight to safety, a sudden import-duty reversal - that most of us don't watch closely enough to have an informed opinion on day to day.

What I do think is worth sitting with is the reframe at the start of this piece: gold in India was never really competing with stocks and mutual funds for the same job. It's insurance dressed up as jewellery. Once you see it that way, the question stops being "will gold go up" and becomes "how much insurance do I actually need" — which is a much calmer question to answer.

Quick takeaways, if you're skimming:

  • Gold's current rally is driven by rate cuts, central bank buying, and geopolitical anxiety - not Diwali shopping.
  • The video's price target (₹1.30–1.35 lakh/10g) has essentially already been hit as of August 2026 - the "safe" bet played out faster than expected.
  • India's gold import duty jumped back to ~15% in May 2026, undoing the 2024 cut - so "Dubai is always cheaper" needs rechecking, not assuming.
  • 22K is for jewellery, 24K is for value storage - pick based on your actual goal, not habit.
  • Digital gold and ETFs are usually more efficient than physical gold if you're investing rather than adorning.
  • A 15–20% commodities allocation, skewed by age and risk appetite, is a reasonable starting range - not a rule.

The metal isn't going anywhere. Your read on why it's moving, and what you actually need it for, is the part worth getting right.


A note on the numbers: gold, silver, and duty figures move fast - what's current as you're reading this may already have shifted. Treat the price levels here as a snapshot of early August 2026, not gospel, and check a live rate before making any actual buying decision.

Saturday, April 26, 2025

Degree, Job, Done?

(3 mins read)

pioneers of Science in the 20th century

A few days ago, I came across a tweet and some replies to it that really made me think. They spoke about privilege, adversity, and how our circumstances shape the path we take, especially when it comes to higher education and innovation in science.

Author's tweet

Support for the author's tweet

Counterpoint to the author's tweet


It made me pause and reflect.
Why didn’t I pursue higher studies?
Was it a lack of ambition, or something else?
What role did my background, my parents, and my responsibilities play?


Growing up, I didn’t have the luxury to dream big. My father worked tirelessly, barely making ends meet. My mother gave tuitions and taught in a primary school, not out of passion but necessity. There are many like me who belong to the lower middle class in India, where engineering isn’t seen as an ambition, but as a gateway to a stable job and a way to start supporting the family. I am the eldest in my family, so when I graduated with a degree in Information Technology, there was no question of further studies. The family needed support, and I had to step in. That job meant survival, more than success. If I had chosen higher studies, it would’ve meant more sacrifices, and perhaps, an increase to the family’s burden, both financially and emotionally. So I shelved my ambitions: not out of regret, but out of responsibility.

But dreams are strange things: they don’t die, they just change form. I don’t want my children to carry that weight. I want to be the cushion I never had, give my children what I never had: the luxury to choose learning over earning. Job and income shouldn't be their finish line. 

They should have the freedom to take risks, to explore astrophysics, quantum computing, study the stars, or fail at a startup. 

Like a runway for a plane, long enough to gain momentum before flight. Not too short for the plane crash, and not too long, for the plane to never take off.
Like training wheels on a bicycle, offering balance until they can ride on their own. 
Or a safety net under a trapeze artist, not to prevent falls, but to allow daring leaps. 

The wealth that I provide for them cannot just be money; it should also include freedom. And if my hard work and sacrifices mean they get to chase knowledge and focus on learning instead of just earning, then I’ve done my part for humanity.


Monday, August 23, 2021

How to start investing in stocks?



For a few months till now, I have been having a lot of discussion with many of my friends on stocks, share price and about finance in general. See, a lot of people in India are not financially literate. In fact, India hovers at around 24% in financial literacy rates, which compared to 55 per cent in developed countries, is woefully insufficient. I too would consider myself among the unfortunate 76% illiterate in finance. But things have changed a bit in the past 1 year. Our life revolves around a lot of things related to finance and hence it is incumbent upon all of us to educate ourselves with regards to things related to money. I have previously written a post about how important it is to be financially literate, you can find it here.

Basic points to act upon while being in 20s and 30s

Lack of knowledge in money, loses money. We are unable to save, and even if we save, we are not able to invest it further to make it grow. Now, these are the points which hurt us a lot. We may not be earning much, but if we are aware of things which I am going to mention now will help to alleviate the money problems.
  • Start saving. No matter how tough the situation is do save whatever you can
  • From the part of saving, keep investing your money
  • There are several places one can invest money on. Mutual funds, real estates, PPF, Fixed Deposit, Stock market, etc.
  • To me stock market is best place to put your money in. Because for others we need more knowledge and in some case we need more money. In stock market, we may even start with 200 INR or less
  • Play a long game. Invest for long term - don't even think about getting back the money before 10 years. Power of compounding will take effect and you will be surprised. Experienced people say that compounding is the 8th wonder of the world

Why to invest long term?

 - No need to track the stocks regularly
 - Tax benefits
 - If you don't sell every now and then, you save a lot of transaction fees
 - In the long run, worrying about loss fades away as its proven without a doubt that Indian market has grown over a period of time(factually beyond 7 years, it has surely given profits)

Once you make up your mind that you're going to invest in stock market, what do you do? Of course you need a demat account from where you can buy and sell your shares. There are several stock brokers which provide demat account, few of which I am listing below. Charges of having an account is different for different brokers (check out the cost online - freely available in several places including YouTube). 


Zerodha
Samco
Upstox
5paisa 

HDFC, ICICI, Motilal Oswal, etc. also provides demat account. But, I have preferred Zerodha for my demat account as the charges are very minimal to none. Complete tutorial to open stock investing brokerage account | Ankur Warikoo Hindi - YouTube

Once you have finalized the stock broker, next step would be shortlist the company in which you would invest. Again, there are several ways to shortlist that and I would highly recommend you to learn that on your own. Do watch some videos on YouTube, there many good presenter who have done a great job in making it easier for us common people. 

Few tips to identify a good company which would grow in the long run and hence give good returns:

  • The company should have been in existence for at least 10 years
  • The revenue growth should be at least 10% year on year
  • Market capitalization (price of stock multiplied by number of stock of that company) should be more than 100 crores
  • The company should have good brand value
  • The company should have a competitive edge
  • Understand the business and make sure you are aligned with the company's vision and mission
You should also check for other fundamental details of a company before shortlisting a company. This video would be very helpful - Investing In 20s Simplified | Top 3 Tools For Fundamental Analysis Of Growth Stocks - Ep. 3 | 2021 - YouTube

There's a free stock market classes, do watch it here - Playlist by Pranjal Kamra

I have shortlisted few stocks, which I have invested in and also plan to invest in future:

  • Hindustan Unilver
  • TCS
  • Reliance
  • Infosys
  • Mindtree
  • IRCTC
  • Pidilite
  • Nestle
  • Zomato
  • Asian Paints
  • LT
  • DMART
  • Titan
  • Relaxo
  • Deepak Nitrate
  • Navin Fluorine
  • Laurus labs
  • Ultratech Cements
  • Marico

These are just few among 1000s of companies listed in the stock exchange. As advised earlier, do your own research, get comfortable and invest long term.

Do reach out to me on Twitter if you have any questions.




Monday, July 5, 2021

Is financial literacy important?




Let me start with asking few questions. The below table consist of 2 columns. Each column has a set of questions, you must answer each question with answer of either “Yes” or “No”. Read the question and see if you can answer it or not. I do not need the answer - I just need to know if you know the answer or not. Confused? Let me clarify – Say the question is “Who won the Bengal election?” If you know the answer, then say “Yes” otherwise “No”. Similarly do that for the below set of questions. Give yourself 1 point if the answer is “Yes” and 0 for “No”. And then sum it up separately for both the columns.

Column A

Column B

Can you recommend me the best app among these: Instagram, Snapchat or TikTok?

What is compound interest? Does it affect us?

Who won the last cricket world cup?

Why do we pay taxes? Can we avoid it?

Which place creates the best cake or the best pizza?

If I give Rs.1000 can you earn 200 by using it within a week?

Where to buy clothes from? Amazon, Flipkart or Myntra?

Can you save money in today’s age of inflation and high expenses?

Can you listen to 5 songs in 20 minutes?

Why does credit card charges interest amount?

Do you have notes for next exam?

What is inflation? How to prepare for that?

Do you have a job? Or do you own a business?

Where would you keep your money for it to grow? Bank? House? or someplace else?


Once you have the points summed up, compare which column did you get the maximum points. If total points in column A is more than column B, then you’re in for the ride. Then this write up of mine is of significance to you – do not stop, continue reading. If you get more points from column B, then too continue reading and let me know if I make sense.

Knowing answers to questions from column A is good for general knowledge but not beyond that. But knowing what is being asked in column B directly affects us. You may not know but if you have answers to questions from column B, then you are sorted with money matters of this life. And you would be called financially literate.


What does It mean to be Financially Literate?

Before I answer that let me tell you what finance is: The money for any project or a business is called finance. Finance is also the activity of managing the money. Taxes, insurance, loans, budgets, banking, credit cards, expenses, savings are all part finance.

Financial literacy is the union of financial, credit, and debt management knowledge that is necessary to make financially responsible decisions or choices that are integral to our everyday lives. Financial literacy includes the skill to understand what using a credit card really means, where to invest, and how to avoid debt. It also gives you answers to questions asked in column B. Financial literacy has a direct impact on us as we try to balance our budget, buy a home, fund our children’s education, and ensure an income for retirement.

The absence of above-mentioned understanding is referred to as being financially illiterate. According to an accredited financial literacy survey, traditionally, India hovers at around 24% in financial literacy rates, which compared to 55 per cent in developed countries, is woefully insufficient. This means nearly 76% of Indian adult population does not understand even the basic financial concepts. This reveals the pressing need to educate the masses about finance. Financial illiteracy puts a burden on the nation in the form of higher cost of financial security and lesser prosperity.

Despite having the world's 10th largest and Asia's oldest stock exchange, low per capita income, education inequality, non-banking habits and informal borrowing and lending, ruled the country for years. Thus, it is imperative for the country to now optimize its resources and boost the economic and financial backbone of the nation. India’s financially literacy rate, albeit abysmal it’s increasing. Not long it was around 15% and now it 24%. Recent reforms like push for bank accounts, digital payments, increase usage of mobiles for payments is significant, as India is already the world’s second biggest smartphone market with over 220 million smartphone users. There are enormous possibilities to go digital and create new opportunities to engage and share financial knowledge with consumers.

How important it is be Financially Literate?

Financial literacy is important because it prepares one with the knowledge and skill to manage money effectively. Without financial literacy, the actions and decisions one make or do not make with respect to savings and investments would lack a strong foundation. Financial literacy helps in understanding financial concepts better and enables one to manage their finances efficiently. It also enables an individual to prepare for future, create himself or herself with enough wealth for his or her retirement.

It is important to inculcate financial awareness at an early age as that would benefit the people in planning their investment properly at a later age. The introduction of financial education at an early level will also help the students to identify whether to narrow down to the same career in future or not. As currently, they are able to take this decision only when they are undergoing graduation.

How would you benefit if you are Financially Literate?

Managing bills: Bills for electricity and such, loans, rent can easily be managed

Savings and expenses: What you earn should be divided into two parts: savings and expenses. Education in finance can help you know how to divide it better

Building wealth: One should be wealthy and not rich. Money with education makes one wealthy

Protecting oneself in case of emergencies: A sound knowledge in finance can be helpful in creating an emergency fund

Achieving goals: Without financial education one mostly lives life from paycheck to paycheck with no goals and ambitions to aspire

Retirement planning: How to save, where to invest – knowing answers to these questions will help one to prepare for their retirement

Lead a tension free life: Being financially literate will also help you stop stressing on your expenses

How to Become Financially Literate

There is no dearth of knowledge in today’s digital age. One only needs to do a simple search in Google or in YouTube to get multiple responses to a single query. I am listing down links to few videos which I hope will be helpful to the seekers of financial wisdom.

Financial literacy for all - https://www.youtube.com/watch?v=pWU3DYvnP0s

Investing in your 20s simplified - https://www.youtube.com/watch?v=qsCUE7kzFHA&t=2s

3 money management tips - https://www.youtube.com/watch?v=TITs-R1BM-M

Best money management tips - https://www.youtube.com/watch?v=uYNfT6B2Hqg

Best personal finance strategies - https://www.youtube.com/watch?v=nbrkmJTuGoY


Source for the writeup - The facts and figures are taken from the following sources:

https://www.livemint.com/Opinion/f5xo11OSPqxGWUdaWKVb8J/Why-India-needs-to-work-on-financial-literacy-now-more-than.html

https://timesofindia.indiatimes.com/home/education/news/why-encouraging-literacy-in-finance-matters/articleshow/78060694.cms

https://www.investopedia.com/articles/investing/100615/why-financial-literacy-and-education-so-important.asp