Gold has been an all time favourite long term investment option for the Indians since ages.We Indians are just fond of investing in this precious metal predominantly in the form of Gold jewellery on special occasions like marriages,festivals,social and religious functions.
Since,the past decade Gold prices have ruled very high,somewhere ranging between Rs.26000 to Rs.30000 per 10 grams in the domestic market.
There are numerous factors that influence the gold prices like :
- Central Bank activities
- Supply vs Demand
- Strong USD
- Global money supply and Inflation
- Other commodity prices etc.
Gold prices tend to rise in times of high inflation and volatile stock market.But,the craze to buy gold has seen an increasing trend only despite its rising prices.
Why Gold Investment is an all time favourite ?
Despite,the fluctuating prices of gold,this royal metal still has strong investor appeal.Investing gold has always proved beneficial in the long run.Moreover,it has fascinated people globally and increased their asset value and proved handy at the time of political and economic uncertainties.
The reasons behind the fondness and attraction towards Gold Investments are quite simple :
- Seeing the rise in prices of gold over the past decades, people prefer to buy when market is low, hoping to earn good returns when markets are high.
- Gifts in the form of gold at the time of marriage and other social functions in India is a common practice.This further increases the demand especially for gold jewellery.
- Buying gold on festivals is another common trend to be seen in India, that also adds to the interest towards this royal metal.This enhances the demand for Gold and people get enticed to buy some gold.
- Gold held as a long term investment can add value to your assets.
- Emotional attachment and personal satisfaction.
- Investment in gold proves handy at difficult times.
- Gold adds variety to your Investment portfolio.
There are different forms of owning this precious metal which are described in detail below.
Besides,traditional methods of investing in Gold like jewellery and coins,these days you can also invest in gold various other forms.
Keep reading further to know about these Gold investment options…
5 Best Options for INVESTMENT IN GOLD are :
1. Gold Jewellery :
This has been the traditional and the most common way of investing in gold. You can invest in the form of gold ornaments designed as per your specifications. Wow….Just the thought of buying Gold jewellery seems so fascinating especially to the Indian ladies out there.But,before buying gold, do check for its purity,quality and the gram weight.
For purity ,check for the carat options like 18k,22k or 24k. Higher the number, higher will be the purity of the gold.But,ornaments are usually made of 18k or 22k gold based on their designs and to increase their strength as well as durability.Further,prefer buying BIS hallmarked jewellery from reputed and trustworthy jewellers.
2. Gold Coins or Bullion :
Investing in gold coins or bars is also good option.Gold bullion refers to the bulk quantity of this precious metal measured by weight and is in the form of bars.It is considered to be 99.5% pure.You can buy them from banks or jewellers.
People normally advocate to buy gold coins and bars from jewellers rather than banks.The reason being that banks can only sell gold coins and bars but can’t buy them back.But,jewellers have the right to do so.So prefer buying gold coins and bars from trusted jewellers.
3. Gold Exchange Traded Funds (ETFs) :
Gold ETF are open ended funds that track the price of physical gold.These are similar to mutual funds where each unit is equivalent to 1 gram of gold.While some funds give option of investing in lower denomination of 0.5 grams also.
It has high liquidity since we can buy and sell Gold ETFs in the stock exchange (like NSE or BSE) like regular stocks anytime during market hours.The trading is done through a Demat account via a depository.Hence,Gold ETFs are a much safer option than purchasing physical gold .
4. Gold Mutual Funds :
These are mutual funds that do not buy gold directly but invest in stocks of gold mining companies.The returns depends on performance of these companies.When gold prices rise,profitability of such gold mining companies also tend to increase.This leads to capital appreciation in the long run.
So,you can earn good returns by investing in Gold Mutual Funds, provided the companies where your money has been further invested perform well in the long run.
5. E-Gold :
E-Gold is an electronic way of buying gold through a demat account which can be freely converted into physical gold. In India,it is offered by the National Spot Exchange Limited (NSEL). It is considered a better investment alternative as compared to Gold ETFs due to its cost effectiveness and better returns over the past few years.
Recently,Gold has proved to be one of the best performing assets providing stable returns better than equity or debt instruments.So,you can plan your gold investments when the market is low i.e.gold prices tend to fall.
Hence,Long term investments in gold either in the form of physical gold, ETFs, gold funds or E-gold will definitely be a valuable addition to your finance portfolio.
So,next time when you think of Investing in Gold, just keep the above points in mind and plan your long term investments wisely.
Feel free to share your valuable feedback in the comment section below…
Also, have a look at our popular posts : Best Long term Investments and Best Tax Saving Options in India that might help you in planning your Investments in an efficient manner.
2 thoughts on “Gold – Is it the Best Long term Investment Option?”
Bonds also seem to be one of the best long-term investments you can buy, and a key component of a diversified long term portfolio.
Gold no doubt is one of the better investment option. I usually trade in Commodities especially in Gold and Silver I got handsome profit for both Short Term and Long Term too. I took the advisory services as investments requires expertise advice to gain better profits.