If you are buying it for ornamental value, the cost of making jewellery comes into the picture.
In many cases, it is as high as 10-15 per cent, which gets shaved off while selling it.
While banks can sell gold, they are not allowed to buy it.
Even if one buys coins from a bank or a particular jeweller, it can seldom be sold back at the market rate to another jeweller.
One will normally give 5-10 per cent less.
In addition, one has to hold physical gold for three years to get long-term capital gains tax benefits.
If one invests in gold exchange-traded funds, the same benefits accrue after just one year.