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In India, gold is not just considered as auspicious precious metal, but also considered as a holistic investment. Indians have always believed in accumulating and protecting wealth by way of buying gold. With the plethora of options available in India, gold buying is now not just limited to gold jewelleries and ornaments.
Gold is considered as a safe investment in comparison to other assets. For beginners into the investment world, for conservative investors, gold investments are a good way to start with. There are reasons why gold is considered as a less risky and safe investment. Important reasons are, it is a precious metal with never-diminishing value. It is also a worthy investment as the gold is hedge against inflation. One more important reason to invest in gold is, as an asset it has low correlation to other asset classes, hence, it can be a good portfolio diversifier.
To start investing in gold coins, gold bars, jewelleries and ornaments more than INR. 2 lakhs, you need to have a permanent account number (PAN). If you would like to start investing gold exchange traded funds, you need to have demat and trading account with the brokerage firm. Sovereign gold bonds can also be bought easily following the same way as that for buying listed shares.
With the development of financial market and digitalisation of every offering, there are various options available today in India for gold investors. Let’s take a look at the gold investment options available for investors in India.
Indian’s love for gold is no longer a secret. It’s an auspicious metal in India that holds a significance in each and every special occasion. It holds a special place in India both as a commodity and a metal. Here are a few good reasons for investing in gold:
Gold prices have been rising from the past month. On the other hand, equity market has seen a major fall. With the view that economic tension or uncertainty is likely to continue for some more time, gold prices may take a further rise as many would be using it as hedge against inflation. There is no doubt that the equity investments will fetch you higher return in comparison to gold over the long run. Hence, many advisors even quote gold as a ‘’dead investment’’ option, but also suggest to keep 10% of your portfolio allocated for gold investments. Yes, that’s because it is the only safe asset class to rely on at the time of economic uncertainties and rising inflation trends.
Are gold investments profitable?
Gold is a low-risk investment option. Be it any kind of gold investment option, average returns on gold investments for long-term is not more than 10% p.a. However, gold investments are the perfect hedge for inflation as they have a low-correlation with other asset classes, specifically equity.
When you are investing in gold futures and exchange traded funds, timing plays an important role to get the maximum profit.
What affects gold price in India?
India is the largest importer of gold. Hence, the gold price in Indian majorly depends on international gold price. Value of reserve currency, global geopolitical tensions, global demand and supply and interest rate trends etc are the factors that majorly affect international gold price. Let’s take a look at factors that affects gold prices in India.