Buying Gold This Dhanteras? Avoid These Mistakes To Make The Most Of Your Investment

Dhanteras marks the commencement of the festival of Diwali in India. The celebration of the festival includes the worship of Goddess Lakshmi for wealth and Lord Dhanvantari for good health. In 2025, the festival will be celebrated on Saturday, October 18. It is believed that buying gold jewelry on the day of the festival invites prosperity and good fortune into the home. On the other hand, the day is also considered auspicious for purchasing the yellow metal for investment purposes.

Investment in gold becomes significant amid the stellar returns offered by the yellow metal in recent times. The price of 24 karat has surged 56.78 per cent so far in 2025 to Rs 12,229 per gram on October 10. On the other hand the price of 22 karat gold price has also witnessed an uptick of 56.78 per cent to Rs 11,210 per gram.

The preference for safe-haven assets amid a tumultuous 2025 and the festive push for buying gold is expected to increase the demand for the yellow metal. The combination of these two factors is expected to spur a buying spree. However buyers should think rationally and be mindful of certain things before buying gold for investment purposes this Dhanteras. Here’s a look at some of the common mistakes which buyers must avoid while purchasing gold this Dhanteras:

Ignoring The Purity of The Gold

Purchasing gold jewellery is one of the oldest ways in which Indians invest in the yellow metal. The demand for gold jewellery witnesses an uptick each year during the festive season. However, amid the rising prices of gold, sellers may tempt buyers with tight budgets to overlook the purity of the gold they are purchasing. This might lead to buyers ending up with gold jewellery with a lower level of purity, resulting in low appreciation for their investment.

Typically gold jewellery is made from 22-karat or 18-karat gold. Buyers can insist on checking the Bureau of Indian Standards (BIS) hallmark to check the purity of the gold. The BIS Hallmark consists of four key markings, the BIS logo, the purity of gold in karats and fineness, the hallmarking center's mark, and the jeweler's identification mark.

Miscalculating The Purchasing Cost

Buyers who are purchasing gold jewellery for the purpose of investment should calculate the cost of their purchase properly in order to estimate the returns from their investment correctly.

Often buyers who purchase gold jewellery for investment purposes forget to factor in the making charges which are included in the price they pay for the jewellery. While these charges can vary significantly from one jeweler to another, they typically range between 8 per cent to 25 per cent of the value of the gold.

Thus, high making costs can ultimately eat into the returns you can get from your investment, thus buyers should be mindful of the cost and look for jewelers who do not charge exorbitant making charges.

While jewellery purchases are preferred during the festive season, investment focused buyers can also consider purchasing gold coins and bars which have much lower making charges. Typically the making charges for gold coins and bars range between 3 per cent to 11 per cent according to the websites of major jewellers.

Not Diversifying Your Gold Investments

While purchasing physical gold in the form of jewelry, coins is part of tradition in India, buyers who are purchasing the yellow metal for investment purposes should diversify their mode of investment.

Buyers should consider diversifying the mode of their investment to look for ways to invest in gold which offer greater liquidity, lower costs and allow for easier storage than physical gold. Diversification becomes even more important as the price of physical gold is already close to record highs, additional costs can increase the acquisition costs for your investment and reduce your gains.

Alternatively, investors can purchase Gold Exchange Traded Funds (ETFs) and Digital Gold. Notably, Gold ETFs are becoming an increasingly popular option among investors. According to data from the Association of Mutual Funds In India (Amfi) inflows into Gold ETFs surged strongly, increasing by 282 per cent to Rs 8,363.13 crore in September 2025 from Rs 2,189.51 crore in August 2025.

Not Doing Thorough Research

Amid the festive rush, gold buyers can often end up making impulsive and emotional decisions. However, even amid the festive rush, buyers should focus on making sound financial decisions rather than making emotional purchases led by social pressures.

Buyers should also avoid getting lured by festive offers and only buy gold after comparing multiple offers and understanding the costs associated with their purchase.

Not Including Storage Costs

Once buyers purchase gold they might need to pay storage costs. Many gold buyers prefer storing gold in banks. Banks charge locker charges to investors for storing their gold safely. This can increase their overall cost. Buyers should add the annual rental charges paid for the locker to their total investment cost.