Akshaya Tritiya Date 2022: Gold price in India is showing an uptick and the yellow metal is currently available at a spot price of around Rs 51000 per ten gram. Traditionally, Akshaya Tritiya, which falls on May 3, 2022, is celebrated as a day when people purchase gold and treat it as a prized possession to own. While the most popular way of owning gold is buying physical gold either in the form of jewellery or gold coins, an increasing number of people are also buying sovereign gold bonds and gold ETF, both available in paper form. In addition, there are gold mutual funds as well.
Also read: Jewellers expect sales during Akshaya Tritiya to surpass 2019 level
Before we read about the gold products, let us see if buying gold in the current environment makes sense. “Gold because of conflicting forces is likely to be in a consolidation mode for some time. In the past, periods of consolidation in gold prices have proven to be great entry points for investors, benefitting from the upcycle in prices that followed. This makes this Akshaya Tritiya a conducive time for under-allocated investors to accumulate gold and bring up their allocation to 10-15% of their portfolio,” says Ghazal Jain, Associate Fund Manager – Alternative Investments, Quantum AMC.
Now, let us visit each one of them and look at their features to make an informed gold buying decision.
Jewellery Buying
If your aim is to use gold as wearable or purchase jewelry for marriage purposes in near future, buying physical gold is the best way forward. However, remember, there are ‘making charges’ involved that may bring down the returns by 5 to 15 per cent for you. Make sure the jewellery has all the four marks of Hallmark to meet its genuinity. At the time of return or exchange of gold through a jeweller, there is a probability of losing a high amount.
Gold coins
Purchasing gold coins available in different denominators such as 1 gram, 10 gram to 50 gram and above is also an option. In addition to private companies there is government owned MMTC offering hallmarked coins through its various outlets all across the country. While buying gold coins make sure to know the return or exchange policy from the manufacturer. Augmont Gold with their Gold Atom collection is another option that one may consider. The Gold Atom coins come with the purity of 24k 999 and are in the form of key chains and bookmarks with lifetime Buy back Guarantee at the Gold value.
Sovereign Gold Bonds (SGB)
Sovereign Gold Bonds (SGB) has emerged as a popular and a much simpler way to invest in gold. One just needs a demat account and a bank account to buy SG bonds as and when the government rolls out the SGB tranches. If one does not want to wait to invest in the primary issue of government’s tranches, they can buy SGB after they are listed on stock exchanges. Each SGB will have a tenure of eight years while premature redemption can be made after five years. The investment in SGB will also earn an interest of 2.5 per cent which is a unique feature of these bonds. Another advantage of buying SGB is that there is no capital gains tax when redeemed on maturity.
Gold ETF
Gold exchange traded funds are available on stock exchanges and the units can be bought or sold on all trading days of the stock exchange. The prices are very close to the real price of gold prevailing on that day in the country. Some of the prominent gold ETFs are Goldman Sachs Gold Exchange Traded Scheme or the Gold BeEs, Quantum Gold Fund (ETF), UTI GOLD Exchange Traded Fund, HDFC Gold Exchange Traded Fund, ICICI Prudential Gold Exchange Traded Fund.
Digital Gold
There are several digital platforms that enable gold buyers to transact in gold digitally around the clock for ticket sizes as low as Rs 1, with the tap of a button. The digital gold purchased on these platforms can also be converted into physical coins or bars and stored in a vault.