From Ornament to Asset Class: Determinants of Investor Attitude and Adoption Intention for Sovereign Gold Bonds and Gold ETFs Versus Gold Jewellery in South Tamil Nadu

Abstract

Gold has traditionally occupied a central position in Indian households, particularly in regions such as South Tamil Nadu, where it functions both as a cultural symbol and a form of financial security. In recent years, the emergence of financial gold instruments—namely Sovereign Gold Bonds (SGBs) and Gold Exchange Traded Funds (ETFs)—has transformed gold from an ornamental asset into a modern investment avenue. This study examines investors’ attitudes and adoption intentions toward SGBs and Gold ETFs in comparison with traditional gold jewellery in South Tamil Nadu. Adopting a quantitative and analytical research design, primary data were collected from 300 retail investors across selected districts using a structured questionnaire. The study employs One-Way ANOVA, Multiple Regression, and Chi-square tests to analyze differences in attitude, identify key determinants of adoption, and examine demographic associations with the shift in preference. The findings reveal a significant attitudinal difference across gold avenues, with jewellery continuing to dominate due to cultural attachment. Financial literacy, trust in institutions, return expectation, and liquidity preference positively influence adoption intention toward financial gold, while cultural attachment and risk perception act as barriers. A significant association is observed between demographic variables—particularly place of residence—and the transition from ornamental to asset-based gold investments. The study highlights that the shift from ornament to asset class is gradual and behaviorally complex, shaped by both economic reasoning and socio-cultural factors. The findings offer valuable insights for policymakers and financial institutions to design culturally sensitive and region-specific strategies to promote efficient and inclusive gold investment practices.