What is investing in gold?
Investing in gold means buying gold and keeping it, in the hope that its price will rise later. You are not lending money to anyone; you own a physical thing yourself, such as jewellery, a bar or a coin.
Gold itself pays no interest or rent. You only find out whether you gained when you sell: how far the price is then above or below what you paid, and how much buying and selling cost you. Many families also keep gold as savings for hard times.
Say Nasrin spends Tk 1 lakh of her savings on a gold chain. The chain sits in her cupboard and earns nothing month to month. If she needs to sell it ten years later, what she gets will depend on that day’s gold price and the shop’s deduction; it could be more than Tk 1 lakh, or less. The numbers are only an example.
How it works
Gold in Bangladesh is weighed in bhori (also called vori or tola). 1 bhori ≈ 11.664 grams = 16 ana, and 1 ana = 6 rati. Purity is given in carats: 22-carat is about 91.6% gold, 21-carat about 87.5%, and 18-carat 75%. Below these sits “traditional” (sanatan) gold, which is less pure still.
Shop prices are set by the Bangladesh Jewellers Association (BAJUS). Looking at the world price, the taka–dollar exchange rate and the local price of pure (tejabi) gold, BAJUS announces a price per bhori for each carat and issues a new one when prices move. Sometimes it changes several times in a month.
When you buy jewellery, VAT and a making charge are added to the announced price. When you sell or exchange it, the shop deducts a share of the weight or value, and the making charge is not returned. So on the day you buy, your gold’s resale value is already well below what you paid.
Say the announced price is Tk 100,000 per bhori. Add a 6% making charge and 5% VAT, and 1 bhori of jewellery costs roughly Tk 111,000. Sell it the next day at the same price with a 15% deduction and you get about Tk 85,000. In other words, the gold price has to rise by about 30% just for you to break even. The rates are only an example; real making charges and deductions vary by shop, design and over time.
Ways to hold gold
- Jewellery
- The most common. You can wear it, but making charges and resale deductions make it the costliest way to hold gold.
- Bars or coins
- Some shops sell them. Making charges are low or nil, but there is still a gap between buying and selling prices, and checking purity matters.
- Hallmarking
- A carat hallmark on jewellery reduces later disputes over purity. The receipt should show carat, weight, making charge and VAT separately.
- Bringing gold from abroad
- Baggage rules allow a set amount of jewellery or bars, in some cases after paying duty. The limits and duty change from time to time.
Why the price moves
The taka price of gold depends on two things: the world price in dollars and the taka–dollar exchange rate. When the taka weakens, gold gets dearer at home even if the world price stays put. That is why many people see gold as some protection against inflation and a falling taka.
But gold can also fall and stay down for years. After its 2011–2012 peak, for example, the world price stayed lower for several years, and gains in taka over that stretch were very small.
What return to expect
Taking the yearly average world price and multiplying it by the average taka–dollar rate, gold rose in taka by roughly 8–14% a year on average over 20- to 30-year spans ending between 2015 and 2025. After inflation, the real gain was roughly 1.5–7% a year.
Over shorter periods the swings are much bigger. Across any 10-year span between 1990 and 2025, the average yearly rise ranged from about 1% to about 23%, depending on the year you bought. Local BAJUS prices differ somewhat from this world-price calculation, and with jewellery the making charge and resale deduction cut your actual gain further.
To see what gold bought in any year would be worth today, and the real gain after inflation, try the KhanFT gold return calculator (/calculators/gold).
Why people choose it
- Over the long run it has given some protection against a falling taka and inflation.
- Familiar everywhere; it can be sold within days if needed.
- There is no risk of an institution failing to repay you; you own the thing itself.
- It can be bought bit by bit, and worn as jewellery.
Points to weigh
- No interest, dividend or rent; the only gain is a price rise.
- Making charges, VAT and resale deductions make buying and selling expensive.
- Prices can fall or stall for years.
- Kept at home it can be stolen; a bank locker costs rent.
- You can be cheated on purity, especially without a hallmark or receipt.
Tax
VAT is charged when you buy; in recent years it has been 5%, added on top of the BAJUS price. The rate can change through the Finance Act or VAT orders.
If you file a tax return, your statement of assets must show how much gold you hold and its value. The 2026–27 budget proposed taxing gains on selling gold and jewellery declared in the return as capital gains; the proposed rate was 15%, and it was reported to have been lowered when the bill passed. Check the current Finance Act for the rate in force and how the gain is worked out.
Tax rules can change with each year’s Finance Act. Before a big decision, check the latest rules or speak to a tax adviser.
How to get started
- Decide what it is for: jewellery to wear, or simply holding value. If the latter, look for items with low making charges.
- Check the BAJUS price announced for that day and compare it with the shop’s price.
- Get a proper receipt listing carat, weight, making charge and VAT separately; buy hallmarked items where you can.
- Ask before buying how much the shop will deduct when you sell or exchange.
- Plan where to keep it safely, and list it in the asset statement of your tax return.
Check before you start
- Have I worked out how much the price must rise just to cover the making charge and deduction?
- Could I wait if prices do not rise for several years?
- Are the carat and weight written on the receipt?
- On what terms will this shop buy it back later?
- What share of my total savings is going into gold?
- Have I thought about the cost and risk of keeping it safe?