You can still bring home Shubh (prosperity) on a budget, starting with as little as ₹ 10 to ₹ 100! Buying gold on Dhanteras is an emotion, but for youngsters, storing heavy jewellery or paying hefty making charges isn’t always practical. The good news?
“Jewellery will always have emotional value, but financial gold is becoming a preferred choice for investing,” says Rajnish Mehan, Executive Director and Chief Investment Strategist at Prudent Asset India. The most popular and traditional investment is physical gold, which comes in the form of jewellery, coins and bars. There are three types to consider: Digital Gold, SGBs and Gold ETFs. Gold ETFs offer liquidity and convenience without storage costs or making charges. SGBs provide additional interest but have limitations around availability, liquidity and taxation. If you’re in a crunch, the most efficent thing to do is invest in Gold EFTs.”
As for Gold EFTs and SGBs, he says, “If the purpose is purely long terms investment, my preference today would be Gold ETFs, followed by SGBs.
What is the long-term outlook for gold?
Because of global uncertainty and its ability to protect investments during market ups and downs, “Gold is expected to remain a valuable investment over the long term. Digital gold comes with GST and buy-sell spreads, while SGBs offer 2.5% annual interest but have liquidity and tax considerations.
Investors should build exposure gradually and treat gold as a portfolio diversifier rather than their primary source of wealth creation,” says Ssonit Rajpurohit, business partner at Motilal Oswal and CFO, Career Pandit. Gold can play a role in diversifying a portfolio, but investors should not assume that recent gains will continue at the same pace. However, after rising sharply and then correcting, prices may remain unstable or move sideways in the short term. Instead of investing a large amount at once or trying to guess when prices will fall, investors should buy gold gradually and hold it for several years. Across physical gold, digital gold, Gold ETFs and SGBs, returns will largely move with gold prices, but costs, liquidity and taxation will affect the final gains. Gold ETFs offer relatively cost-efficient exposure, while jewellery involves making charges and storage costs.
