Dipankar Jakharia
Guwahati
The Middle East is on fire. Truth be told, I had to renew my Dish TV subscription after a gap of two years. Normally, I rely on print media—both online and offline—for my news. But during a crisis, television news channels become far more resourceful with real-time updates.
However, if you are used to consuming news at the slower pace of a newspaper, as I am, it becomes difficult to sustain attention for long amid the high-voltage presentation of television news.
Predictably, the price of gold rose by more than ₹3,000 and has been holding up since then. My old readers will remember that I had explained earlier how during crises the price of gold tends to rise, as investors shift their focus to assets that are perceived to be stable and capable of preserving the value of their portfolios.
But the price of silver has fallen by about Rs 7,000, which has confused and worried some investors. At first glance, it may appear puzzling. Clearly, investors prefer gold over silver during times of crisis.
So why has the price of silver declined when gold has risen?
The answer lies in the way these metals are used.
Gold has virtually no practical use in our day-to-day life apart from being a precious metal. It carries historic, emotional, and cultural value. It is widely used in ornaments, but its industrial use is minimal.
Silver, on the other hand, has both historical and industrial value. Roughly half of silver’s demand comes from industrial applications, while the other half comes from its role as a precious metal and investment asset.
Therefore, when the possibility of an economic slowdown arises—as often happens during geopolitical crises—industrial demand expectations weaken. This puts pressure on silver prices.
That is why one should not expect gold and silver to always move in the same direction. If silver had no industrial value and were treated purely as a precious metal like gold, their prices might have moved more closely together.
Historically, silver prices have fluctuated far more wildly—both upward and downward—precisely because of this dual character.
So now you know that gold and silver can move in opposite directions in response to the same crisis, and that gold tends to dominate when investors seek protection during uncertain times.
Let us now discuss another aspect.
Suppose you are preparing for the ultimate doomsday scenario and believe that in extreme circumstances gold will provide the ultimate protection—something we often see in Hollywood movies—when currencies or financial systems fail. You may then wonder how much gold one can legally keep at home.
There is actually no legal limit on the amount of gold a person can hold.
However, there is a circular issued by the Central Board of Direct Taxes (CBDT) which provides guidance to tax officials during search operations. The circular specifies limits below which jewellery should normally not be seized during an income tax raid.
According to this guideline:
• Up to 500 grams of gold jewellery should not be seized from a married woman
• Up to 250 grams from an unmarried woman
• Up to 100 grams from a man, whether married or unmarried
It is important to note that this guideline applies only to jewellery, not to gold coins, bars, or diamonds. The purpose of the circular is largely practical—to avoid unnecessary seizure of personal jewellery during raids.
The reason I mention this is simply to keep readers out of trouble. In times of fear, people sometimes accumulate gold at home without understanding the possible implications. If a search were to take place, it could lead to unnecessary harassment if the ownership of the gold cannot be explained.
For inherited jewellery, it is helpful to have supporting documents such as a will or family records. But if you have purchased gold or jewellery from your legitimate income, paid the necessary taxes, and retained the purchase receipts, there is absolutely nothing to worry about.
