Tips for Buying Gold on Dhanteras: How to Avoid Losses and Gain Double Benefit

Residents of the country traditionally wait for the festivals of Diwali and Dhanteras to purchase gold and silver, as buying these metals on Dhanteras is considered auspicious. This time, a large-scale purchase of gold jewelry is expected, especially by women, who view it as an investment and a connection to the arrival of Lakshmi.

If you plan to buy jewelry on Dhanteras, you should pay attention to certain points to buy pure items at a fair price and avoid being misled by jewelers. Online purchases are less likely to have such problems, but caution should be exercised when visiting physical stores.

When buying gold from jewelers, you must carefully examine the bill to ensure which charges have been included. Jewelers often add various payments to the bill to mislead customers, and buyers lacking sufficient information cannot object.

According to central government data, when purchasing jewelry, customers should only pay three components: the item's value depending on its weight, the making charge, and VAT (3%). Regardless of whether the payment is made online or offline, the VAT is only 3%.

According to IBJA, 22-karat gold cost about ₹1,30,359 for 10 grams on November 6. It is worth noting that any additional fees charged by jewelers can be disputed, as some sellers illegally take money under the pretext of weight control or labor charges. Such payments should not be made, and a complaint can be filed against the jeweler.

It is important to understand that jewelry is not made from 24-karat gold. Most items available on the market are 22, 18, or 14 karats in purity. Therefore, when purchasing, you need to know the current price of gold in the precious metals market to buy the item at the correct cost.

Furthermore, you should always negotiate the making charge, as many jewelers reduce this amount after negotiations. The making charge can reach up to 30% of the value, and this is where jewelers make the largest profit.

Also, always demand an original receipt so that there are no problems in the future regarding the purity and weight when trying to sell the jewelry. Regarding purity, only purchase items with a hallmark. The hallmark indicates five digits, and the mark differs for each carat: for example, 916 is indicated for 22 karats, 875 for 21 karats, and 750 for 18 karats, which eliminates doubts about purity.

As households across India celebrate the Dhanteras festival on Friday, November 6th, by purchasing gold and silver, financial specialists recommend that investors look beyond this auspicious occasion and consider the role of precious metals in their overall investment portfolio.

After an unusual rally followed by sharp corrections in 2026, the question is no longer whether to buy gold or silver, but how much to hold, when to enter the market, and whether both metals deserve equal footing in an investment portfolio.

The general advice is to view gold as a portfolio hedge rather than a short-term bet, to avoid buying large amounts solely because of Dhanteras, and to exercise greater caution regarding silver, which is more volatile and dependent on industrial demand.

Differences in Demand for Precious Metals

Vikas Gupta, CEO and Strategist at OmniScience Capital, distinguishes between two types of demand for precious metals in India: purchases driven by cultural events and weddings, and investment demand, which depends on price movements.

He noted that there are two types of demand for gold and silver in India. The first is inelastic demand, which arises during Dhanteras and other festivals, as well as wedding season. A certain minimum volume of gold is required for a wedding, depending on socio-economic and cultural groups. The second is elastic demand, related to price changes and speculation about the price direction.

Gupta predicts that purchase volumes during Dhanteras will remain stable or increase, while demand during the wedding season may be slightly stronger. He added that the sharp rise in gold prices, followed by a correction, might make buyers feel they can afford more gold when comparing current prices to the previous peak. 'Gold as an investment continues to be preferred by Indians,' he stated.

Asset Allocation Recommendations

However, festive purchases should not automatically lead to an increase in the proportion of precious metals in a portfolio for investors. Ashish Rajodia, Head of Commodities at PL Capital, believes that allocating around 5-10% of the total portfolio to gold and 2-3% to silver suits most investors. Since silver is more volatile and also depends on industrial demand, it should constitute a smaller portion. Both metals have risen significantly over the past year, so the question is not whether to buy, but how. Instead of making a lump-sum purchase during Dhanteras, investors can spread purchases over several weeks through gold ETFs or coins, and top up during dips to average the entry price. Those who have already reached their target allocation do not necessarily need to buy more, while those below it can build their position in tranches.

Investors whose allocation is below the desired level can consider increasing exposure in tranches instead of a large purchase during Dhanteras. Gold Exchange Traded Funds (ETFs) offer one path to financial participation, while coins and bars provide physical ownership. Those who already have the desired allocation do not need to buy more just because it is an auspicious day.

Caution Regarding Silver Volatility

The sharp volatility of silver requires special caution. Prasanjit Paul, Fund Manager at 129 Wealth and Research Analyst at Paul Asset, noted that the recent recovery in silver prices should not be taken as the start of a new bull market. He emphasized that silver is still in a broader downtrend, and the recent recovery looks more like a technical rebound after prices entered oversold territory. Such rebounds are normal after a sharp fall and do not signify the start of a new bull cycle.

Paul pointed to the global drop of the metal by 18.6 percent in October as evidence of how quickly sentiment can change after a sharp rise. 'We maintain a bearish outlook on silver in the short term and do not recommend chasing the current rebound,' he said. Those with real future needs for jewelry or gifts can gradually buy during larger dips, but investors putting in new funds may wait for greater price stability.

Silver prospects are also linked to expectations for global interest rates, the US dollar, and industrial needs. A stronger dollar and higher US Treasury yields usually negatively affect silver, as the metal does not generate income. Although demand from solar panels, electric vehicles, electronics, and data centers provides long-term support, Paul mentioned expectations of slowing industrial production in 2026, partly due to reduced use of silver in solar panels.

Long-Term View on Precious Metals

Meanwhile, Motilal Oswal Financial Services maintains a constructive long-term view on precious metals despite short-term volatility. In its latest quarterly report on precious metals titled 'Gold Rally: Deferred, Not Missed,' it states that corrections can provide opportunities for disciplined accumulation. The report notes that gold reached nearly $5600 per ounce in January 2026 before falling below $4000 and then recovering. Silver rose above $100 per ounce before undergoing a sharper correction.

Navneet Damani, Head of Commodity Research at Motilal Oswal Financial Services, noted that gold continues to serve as a defensive asset amid global economic and geopolitical uncertainty. However, its short-term direction will remain sensitive to US Federal Reserve policy, inflation, the dollar, and real bond yields. 'In India, higher prices have moderated discretionary jewelry demand, although wedding-related purchases and investment demand remained relatively resilient,' he said.

The brokerage firm recommends a 'buy the dip' approach for gold, setting an international accumulation zone of $3800-$3900 per ounce, a short-term target of $4200, and a medium-term target of $4500-$4700. In the domestic market, based on the USD to INR exchange rate of 96, they see ₹135,000 for 10 grams as a favorable accumulation zone, with a short-term target of ₹148,000 and a medium-term target of ₹160,000-₹168,000.

These broker estimates are market assumptions, not guaranteed price levels or returns. Investors should also consider currency fluctuations, taxes, manufacturing charges, and the difference between physical gold prices and financial product prices when assessing their returns.

Manav Modi, Commodity Analyst at Motilal Oswal Financial Services, stated that silver may offer greater growth potential than gold but comes with significantly higher volatility. The firm's overall view is that investors should accumulate during corrections, not chase price momentum. 'The next inflection point for gold may occur when real yields stop rising, especially if persistent inflation, fiscal issues, or economic slowdown begin to alter the monetary policy forecast. We continue to maintain a 'buy the dip' approach to gold, with an accumulation zone of $3800–$3900 per ounce, a short-term target of $4200, and a medium-term target of $4500–$4700. In the domestic market, assuming USD/INR at 96, we see ₹135,000 as a favorable accumulation zone, with a short-term target of ₹148,000 and a medium-term target of ₹160,000–₹168,000. Silver offers greater growth potential, but investors must remember its significantly higher volatility. Overall, instead of chasing price momentum, we believe investors should focus on disciplined accumulation during corrections, taking into account the role of precious metals in capital preservation and portfolio diversification,' Modi said.

Motilal Oswal reported that global gold ETF volumes grew by approximately 187 tonnes in August and September 2026 to a record 4256 tonnes. Inflows in the third quarter reached a record high of $31 billion. In India, inflows into gold ETFs grew by 71 percent month-on-month to ₹44.5 billion in September, while silver ETFs attracted inflows of ₹19.7 billion.

'Against this backdrop, gold continues to retain its appeal as a relatively defensive asset, while silver offers greater growth potential but carries a higher degree of volatility. As global macroeconomic conditions, monetary policy expectations, and geopolitical events continue to shape the precious metals market, investors may consider a disciplined accumulation strategy during price corrections rather than chasing short-term momentum,' the brokerage agency noted in its note.