INSUBCONTINENT EXCLUSIVE:
Gold Investment: Gold is a strong shield against inflation and a hedge against the dollarGold has occupied a prominence place in human
The recorded history of gold dates back to ancient Egypt around 3,000 B.C
Gold was much sought by pharaohs and temple priests alike, and was used to create both jewelry and idols for worship
Back home, gold earns a special mention in the Hindu epics, which demonstrates that the yellow metal was cherished by Indian society and
priced into gold," according to Sudheesh Nambiath, Head, India Gold Policy Centre (IGPC)
variety of reasons, ranging from its religious significance to its utility as a tool of investment
Gold is revered as a symbol of Hindu Goddess Lakshmi in India
It is considered auspicious to buy gold during festivals such as Diwali, Dhanteras and Akshaya Tritiya.Gold has become synonymous with
wealth creation as its price trends upwards over the long run
Jewellery is regarded as a traditional store of wealth in rural India and this hinterland accounts for two-thirds of the country's total
gold demand.Gold is a strong shield against inflation as due to its limited supply, gold appreciates in tandem with a general increase in
Gold is a hedge against the dollar as due to its pricing in US dollar terms, weakness in the dollar inevitably leads to a rise in the price
Gold is a safe haven asset as it remains stable amid stock market corrections, currency wars, social instability and high inflation
Gold acts as a bulwark in times of emergency as it is can be converted into cash at ease.How to Invest in GoldThe beauty of gold, from the
investment point of view, is that it easily lends itself to a wide array of investments ranging from physical gold to mutual funds and
bonds.Physical GoldBuying physical gold is inarguably the oldest route to gold investment
Gold can either be bought in the form of gold jewellery or as gold bars and coins
Gold jewellery is basically purchased for consumption purposes, although it serves as an investment product in itself
It is necessary to keep in mind that a buyer not only pays the market price of gold, but also making charges for the jewelry and this can be
as high as 15% of the actual price of gold.Gold bars and coins are more profitable investments than jewellery
The essential difference between jewellery and gold bars / coins is that the latter are made of pure gold and do not involve any making
Gold coins and bars are made available through any designated outlets of Metals and Minerals Trading Corporation of India (MMTC) and
specified bank branches and post offices.Gold ETFGold ETFs, as the name suggests, are exchange-traded funds that invest in physical gold
Gold ETFs are akin to stocks as they are traded on the bourses, and a demat account and trading account are all that are required to go for
Gold ETFs invest in 99.5% pure gold
About 90% of the invested money is invested into physical gold and remaining goes into debt Instruments
The best part about gold ETFs is, they are listed on the BSE and NSE, which means that they can be easily transacted and in quantities lower
than physical ownership of physical jewellery, bars and coins.Gold FundsGold funds invest in the shares of companies operating in gold and
Gold funds, unlike gold ETFs, are managed by fund managers on the lines of mutual funds
Gold mutual funds are ideal for risk-averse investors as they work on the principle of diversification
They invest across a gamut of companies, rather than putting all eggs in one basket.Gold Fund of FundsGold Fund of Funds or Gold Saving
Funds are mutual funds that invest in gold ETFs
These are ideal for investors who do not want to obsess about individual gold ETFs
Gold funds of funds are investor-friendly; a DEMAT account is not a pre-requisite for investing in these financial instruments and there is
no need to constantly monitor the investment portfolio.Gold Mining SharesInvesting in gold mining shares is another attractive option for
those bitten by the gold investing bug
Prospective gold investors can purchase shares of gold mining companies directly from the secondary equity markets
These prices function just like any other company shares listed on the bourses and tend to rise in unison with appreciation price in global
gold prices.Sovereign Gold Bonds (SGBs)Sovereign Gold Bonds (SGBs) are issued by the Reserve Bank of India from time to time
A window for fresh sale of SGBs is opened every 2-3 months and remains open for around a week each time
These bonds have a tenure of eight years, with an exit option in the fifth, sixth and seventh year.To conclude, gold counts among the most
popular investment options and will remain so in the foreseeable future
It is of paramount importance that investors to have clarity on their investment goals, time horizon and comfort level, and choose the gold
investment option that best resonates with them.
