Winning Bizness Desk

Mumbai: As India celebrated Dhanteras a few days back, the auspicious occasion for investing in gold, experts predict that gold prices could hit an all-time high of Rs 87,000 per 10 grams by next year. Currently priced at approximately Rs 78,000 per 10 grams, the price surge is anticipated due to ongoing economic factors and global uncertainties, says Anuj Gupta, Head of Commodities and Currency at HDFC Securities. With gold offering stable returns over time, this could be an ideal moment for potential investors to explore various options for gold investment – including some that allow you to start with just Rs 1.

1. Physical Gold: Coins and Bars

One of the traditional ways to invest in gold is through physical gold, including coins and bars. While jewelry is another option, experts often advise against it as an investment due to additional costs like GST and making charges, which lower the overall returns. Moreover, jewelry often uses gold below 24-carat purity, further impacting its investment value. For better returns, opt for gold coins or bars, which are available in 24-carat purity and often come with certification.

2. Sovereign Gold Bonds (SGBs): Government-Backed Returns

Sovereign Gold Bonds (SGBs), issued by the Government of India, are another popular option that offers a secure investment. Unlike physical gold, SGBs are denominated by weight rather than price, so if you buy a 1-gram bond, its value will match the current gold price per gram. The added benefit is an annual interest of 2.50%, payable semi-annually, on the issue price. To buy SGBs, you’ll need a Demat account through a broker or can also opt for offline purchases. Once purchased, the bond’s equivalent value is deducted from your linked bank account. These bonds are considered a long-term investment, typically maturing in eight years, with early exit options available after the fifth year.

3. Gold ETFs: Trade on Stock Exchanges

Gold ETFs (Exchange-Traded Funds) allow investors to trade gold on stock exchanges, similar to shares. The price of a gold ETF closely follows the spot price of gold, so it’s a practical way to invest in gold without owning it physically. With a Demat account, investors can buy gold ETF units listed on NSE or BSE, making it easy to buy and sell gold at market rates.ETFs are well-suited for investors looking for flexibility and liquidity, as they can be traded any time the stock market is open. For those seeking shorter-term investment horizons or who want to avoid the costs associated with physical gold, gold ETFs are a viable choice.

4. Digital Gold: Convenient and Affordable

With the rise of digital payment platforms, investing in gold has become easier and more accessible than ever. Platforms like Amazon Pay, Google Pay, Paytm, PhonePe, and Mobikwik allow users to purchase digital gold starting at just Rs 1. The purchased amount is stored in insured vaults, making digital gold a secure and affordable option for beginners or those looking to invest small amounts regularly. Digital gold enables flexibility in purchasing, as buyers can incrementally accumulate gold over time without needing significant initial capital. However, it’s important to verify the platform’s safety standards before investing

Historical Returns: Gold as a Long-Term Investment

Over the past five years, gold has provided a return of 55%, averaging about 11% annually. In October 2020, gold was priced at Rs 50,605 per 10 grams, compared to today’s rate of Rs 78,177. Given the geopolitical tensions and global economic conditions, experts forecast a continued upward trend, making it a potentially valuable asset in one’s portfolio.

Tips for Buying Gold Wisely

1. Purchase Certified Gold: Always opt for BIS-certified gold with a hallmark of authenticity, which includes a unique identification number (HUID) indicating the purity.

2. Cross-Check Prices: Ensure you verify the price based on gold's purity (24, 22, or 18 carats) through reliable sources, such as the India Bullion and Jewellers Association website.

3. Avoid Cash Payments: Pay digitally or through UPI for transparency and retain a bill. If purchasing online, inspect the package on arrival.

4. Understand Resale Policies: If you’re investing with the intent to sell in the future, inquire about the jeweler’s buyback policy and any conditions that might affect resale value.

Investing in Gold: A Cautious Approacht

According to Anuj Gupta, it’s advisable to keep gold investments between 10-15% of your overall portfolio. Gold can serve as a stabilizer during market volatility, but over-investing could limit your returns in the long term. As gold demand in India remains high, with an annual consumption of 700-800 tons, investors can find stability in gold. However, it’s always wise to approach gold investment as part of a diversified strategy.