The competition, organised by the Trades House of Glasgow, is open to craft, design and technology students in the city's nine FE colleges. Mr Kelly, a retired English teacher who taught at Dunoon Grammar, crafted his guitar in Indian rosewood and mahogany with Sitka spruce soundboard.
His course at Anniesland is the only one in Scotland and one of a handful in the UK which specialises in guitar and violin repair and construction.
He is the second student from the college's musical string instrument course to have won a Craftex gold medal in 10 years.
The Trades House of Glasgow aims to encourage the maintenance and revival of traditional crafts as well as building technology-based skills.