By Neha Mehrotra
As the festival season approaches, gold takes centre stage not only as a symbol of cultural significance but also as a potentially lucrative investment option. Gold, often considered a safe asset, appears to shine brighter than ever, not just in the global market but particularly in India, where its value transcends mere financial worth. The geopolitical tensions in the Middle East and various other recent global events have recently sent gold prices on an upward trajectory, raising the question of whether or not it is an opportune moment to invest in the yellow metal. With experts anticipating a price surge this Diwali, let us delve deeper into whether you should invest in gold this festive season.
A Look at the Value of Gold
According to figures compiled by the Indian Bullion and Jewellers Association, gold prices in India have shot up by as much as ₹5,720 per gram for 22-karat gold and ₹6,240 per gram for 24-karat gold as of October 30, 2023, touching ₹62,400 per 10 grams. Even in the international market, the value of gold has vaulted over $2,000, amidst an escalation in the Israel-Hamas conflict, according to World Gold Council data.
Should you Invest in Gold?
Experts suggest that the outlook for gold remains resolutely bullish, driven by a variety of factors like the conflict in the Middle East and the impending festive season in India. Analysts are confidently predicting that gold will continue to offer attractive returns. They suggest that the enduring uncertainty on the global stage is further expected to increase the value of the yellow metal, making it a safe investment option.
Moreover, as we approach the festive season, the physical demand for gold traditionally experiences a notable surge. This seasonality effect is a significant driving force behind the upward trajectory of gold prices, adding to its allure as an investment. Additionally, market experts are anticipating a further weakening of the Indian rupee, a development that could act as a favourable tailwind for gold prices in the near future.
The profound sentimental value associated with buying gold during festive seasons and weddings form an integral part of Indian culture. Colin Shah, the Managing Director of Kama Jewellery, highlights that this sentiment is set to keep the demand for gold buoyant during the festive season and the upcoming Indian wedding season.
Your Investment Options
Investing in gold offers a variety of choices, each with its unique perks. Traditional physical gold, while cherished for its tangible presence, does come with some hassles, like the need for secure storage and ensuring its purity. In contrast, digital gold options, which include Mutual Funds, Sovereign Gold Bonds (SGB), and Gold Exchange-Traded Funds (ETF), present a more convenient and safer route. These digital forms are gaining popularity for good reasons.
When deciding which form of gold suits you best, it depends on your personal preferences and investment objectives. If you prefer flexibility and quick access to your investment, ETFs and Gold Mutual Funds provide liquidity. On the other hand, Sovereign Gold Bonds (SGB) are a viable choice for those seeking long-term stability and the bonus of additional returns.
