We Indians, especially Malayalis, love golden ornaments. Gold as jewellery has a use as a fashion accessory, especially during the time of marriage. Beyond that, gold is also considered as wealth. The gold jewellery received during marriage is something which is inherited from one generation to another. It should be considered as a security and should be sold or pledged only at the time of a crisis. Selling gold for money, unless it is unavoidable is a bad decision. Let us explore why using a hypothetical case.
Let us assume that you have a daughter. You sold the gold jewellery you inherited during your marriage. When you sell for cash, it will fetch a rate lower than market rate. Now you have invested that money in some other form.
When your daughter’s marriage happens after a few years, you will buy jewellery. You have to pay making charges on an average of 20%. On an average the gold prices might have increased by 7 to 8% per annum in the long term. In order to balance the transactions, at that time the money you had investment should fetch you returns that will be good enough to buy the same amount of gold. Practically, it is not so easy. Therefore if you have a daughter it is better not to sell the gold jewellery.