On MCX, gold futures fell 0.20 per cent to Rs 50,350 per 10 grams (gm) while silver futures declined 0.40 per cent to Rs 62,652 per kilograms (kg). In the previous session, gold prices rose 1.4 per cent or Rs 700 per 10 gm while silver rates had surged 3.3 per cent or Rs 2,000 per kg. On Monday, gold prices had crashed Rs 2,500 per 10 gm amid news over the Covid-19 vaccine.
"In India, there is no better time than Dhanteras to Buy Gold as it is considered as one of the most auspicious occasions in Hindu culture and marks the beginning of the festival of light Diwali. Historically, the Gold prices have moved up during this time of the year as Indians are known to Buy Gold and silver on this auspicious occasion, improving the yellow metal's physical demand. The prices are close to Rs. 50,000 per 10 grams now and no better time to accumulate Gold as an investor, especially the ones who missed the recent rally," said Sunilkumar Katke, Head - Commodity and Currency, Axis Securities.
According to Mr. Katke, the future still looks bright for Gold prices considering the Festive demand, uncertainty linked to US elections with a possible new President-elect bringing in many policy changes.
Analysts believe that the additional stimulus measures the deal with the pandemic, lower real yields backed by higher inflation across the globe may support the Gold prices up towards Rs. 52500 - 53500 levels again in a month, thus making it an excellent opportunity to buy on this auspicious occasion of Dhanteras.
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What are the best options to buy Gold this Diwali?
Gold remains one of the most preferred investment assets for Indians. Considering the auspicious occasion of Diwali and Dhanteras are just around the corner, millions of Indians will invest in Gold this week. There are multiple ways to invest in Gold, both in physical format and paper format, using both offline and online modes. ABP News explores some of the options to buy Gold.
Physical Gold:
One way to purchase in physical Gold is through gold coins and bars. These are available in denominations of 1 gram, 5 grams, and 10 grams. Gold bars would be available from 20 grams onwards.
Check for the purity of all gold coins and bars, which should be hallmarked as per BIS standards. Government company MMTC offers gold coins and bars with buyback options. These are available through offline and online stores and are assured of the highest quality.
"Physical Gold is the best way of buying precious metal because of the instant liquidity it provides. In Sovereign Gold Bond (SGB), liquidity is the issue. People of rushing to buy Gold as many marriages were cancelled during the lockdown period and are planned in the coming days. I think the prices may go up to Rs 55,000 due to the pent up demand," Kumar Jain, President –Mumbai at India Bullion Jewelers Association, told ABP News.
Another way to buy physical Gold is through online options like PayTM, 5paisa.com, among others, as these platforms allow you to purchase Gold for as low as Rs 50.
"The Gold bought by you is stored centrally and shown to you as a Digital Vault balance of the number of grams owned by you. You have an option to either take Delivery of this Gold or Sell it off on the App directly from your vault," Rupak De, Senior Technical Analyst, IIFL Securities Ltd told ABP News.
Non-Physical or Paper Gold:
Gold ETF: One may also own paper gold through gold exchange-traded funds, which function as a mutual fund. One may purchase units of such ETFs as low as under Rs 50. These instruments trade on BSE and NSE and can be easily bought or sold. However, one must keep in mind that an expense ratio, usually less than 1 per cent, will incur.
Sovereign Gold Bonds (SGB): SGBs are issued by the government from time to time. Physical Gold bought from jewellers or banks could come at a premium of somewhere around 10 per cent . The price of SGB is close to the actual gold price. Further, SGB's taxation favors investors as the gains are exempted on maturity, unlike physical Gold where gains are taxable.
However, the tenure of SGB is eight years; the lock-in will be for five years. From the 5th year, the exit option can be exercised on the interest payment date. The government has a fixed interest of 2.50 per cent per annum on the investment, with no interest compounding. The minimum permissible investment is 1 gram of Gold.