- Indians buy
gold onAkshaya Tritiya as it is believed that the day symbolises good luck, success and fortune. - This year Akshaya Tritiya falls on April 22 and companies are offering multiple ways consumers can buy gold.
- Gold has risen 15% since the last Akshaya Tritiya on May 3, 2022.
Gold prices scaled a record high of ₹61,660 per 10 gm on April 19, 2023 in Mumbai.
As per mythology, a number of events took place on Akshaya Tritiya, making it an auspicious day. For instance Maharishi Ved Vyasa, the author of Mahabharata, is believed to have started narrating the epic to Lord Ganesh on this day.
This year Akshaya Tritiya falls on April 22, Saturday. And gold has risen 15% since the last Akshaya Tritiya on May 3, 2022, according to Quantum AMC. Gold prices hit a record high at ₹61,660 per 10 gm on April 19, 2023 in Mumbai.
“This Akshaya Tritiya seems like an opportune time to load up your purchase as the macroeconomic backdrop and risk-reward dynamics seem to favour gold and the downside looks limited,” said Ghazal Jain, fund manager- alternate investments, Quantum AMC.
The yellow metal is considered as a hedge against inflation and a safe haven compared to assets like equities, bonds and currencies. A mild recession and weaker earnings have historically been gold-positive. A further weakening of the dollar as inflation recedes could provide support for gold. The current uncertain macro environment triggered by the war between Russia and Ukraine, high inflation across the globe, rising interest rates and now the banking crisis in the US and Europe – all make a case for buying gold.
“Domestic gold prices are derived from international gold prices. International gold prices are priced in US dollars and hence the dynamics of the US economy are big drivers of gold prices. Expectations of a monetary policy pivot by the Federal Reserve are gathering steam after a regional banking crisis in the United States made the economic impact of higher interest rates apparent,” said Jain.
“Further deterioration in economic conditions could drive risk aversion, hurt risk assets and lead gold prices up,” she said.
Soaring gold prices have led Titan’s jewellery arm Tanishq to reinstate its advanced booking option, allowing buyers to lock in the price of the yellow metal ahead of Akshaya Tritiya. It has also amplified its gold-exchange programme and introduced an affordable range of jewellery to woo consumers.
From gold jewellery and coins to gold ETFs or exchange-traded funds, there are multiple ways in which one can invest in gold. Here are some ways to invest in gold:
You can buy gold coins from MMTC-PAMP – a joint venture between Switzerland-based bullion brand PAMP SA and MMTC, a Government of India Undertaking. You can also buy them from non-government sources such as jewellers and bullion traders.
Sovereign gold bonds (SGB), a substitute to physical gold, is a paper issued by the government that is denominated in terms of grams of gold. Basically, SGBs give investors an exposure to gold, but not in a physical form like gold bars or jewellery.
The Indian government had initiated the investment options in 2015 as an alternative to owning physical gold. These bonds have a term of eight years with a lock-in period of five years. However, that does not necessarily mean that the investment needs to be compulsorily held till maturity. Investors can opt for premature redemptions.
Additionally, gold bond investors have the option of selling the bonds anytime on the stock exchanges.
Gold exchange-traded funds (ETFs)
Gold ETFs are passive investment instruments that invest in gold bullion, and aim to track the domestic physical gold price. In other words, Gold ETFs are units representing physical gold which may be in paper or dematerialised form. ETFs reflect the current gold prices unlike physical gold prices, which vary across India depending on local taxes in each state, transportation cost and other related costs.
Since ETFs are listed on an exchange, they offer high liquidity. You can buy or sell your holdings at any time during the day at the real-time price of gold.
Gold mutual funds are a type of mutual fund that invest their corpus in various gold forms including physical gold and gold mining companies. The performance of gold funds is dependent on the movement of stock prices of these companies.
Since gold mutual funds are actively managed by a fund manager, it has the potential to offer higher returns as compared to gold ETFs that mimic a market index.
It allows you to purchase the precious metal online, but eliminates the need to physically store it. Digital gold can be bought online through fintech platforms like Groww, Kuvera etc., and through brokers as well. The gold purchased as digital commodity will be stored in insured vaults by the seller on behalf of the customer. All you need is internet/mobile banking and you can invest in gold digitally anytime, anywhere. Moreover, you can invest an amount as low as ₹10.
Here is how to invest in digital gold via fintech platforms:
- Signup on the fintech platform to start the investment
- Enter an amount in rupees or grams
- Complete the know-your-customer (KYC) process
- Pay for the investment
- Store your gold in a secured locker
- Later, when you sell you can choose to sell your gold digitally on the platform or take physical delivery of the gold. You can request for a doorstep delivery of your gold in the form of coins or bullion.
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