With Indians celebrating Dhanteras on October 29, 2024, buying gold today will both be considered auspicious (as Indians traditionally buy gold on Dhanteras) as well as fulfil a strategic investment (gold being a precious asset that can act as a hedge during uncertainties).
Today, the price of 24-carat gold (highest purity) in Delhi, is at Rs 8,060 per gram, up Rs 65 from yesterday. The price of 22-carat gold, popular for jewellery, is priced at Rs 7,390 per gram, up Rs 60 from yesterday.
Silver is priced at Rs 97,900 per kilogram. This metal is often chosen by investors on Dhanteras or Diwali, who are looking to diversify their assets.
In Samvat 2080, gold and silver gave 39.7 per cent and 44.3 per cent returns, respectively, outperforming the Nifty that gave a return of 27.9 per cent.
Gold: Future Ahead
Tapan Patel, fund manager-commodities, Tata Asset Management said that Indians though traditionally invest in gold during auspicious occasions as part of a religious tradition in India, people should also look at it from a point of diversification.
“Buying gold on occasions like Diwali or Dhanteras is believed to bring prosperity and wealth. People tend to buy gold in the form of jewellery to gift and wear on festival days, but it is also an indirect investment, as the metal keeps its intrinsic value,” he said.
“As the current market environment shows high volatility in all asset classes, one should prioritise diversification over high-risk investments, which may grow over time, to secure future returns. There could be nothing more illuminating this year on Diwali other than gold. Gold prices are hovering near all-time highs, crossing $2,750 per ounce at COMEX. On the domestic front, gold prices are up more than 20 per cent year-to-date (YTD), and have crossed Rs. 78,000 per 10 gram at MCX,” he added.
He said geopolitical events have also affected gold prices in recent times.
“Though the recent surge in gold prices was a momentum play due to escalation in the Middle East, other factors, such as the US Federal Reserve interest rate cut, central banks gold buying, upcoming US election, and geopolitical risks continue to remain the key supportive factors for bullion prices. Investors may look for accumulation on any decline in the prices,” he said.
Gold As An Investment
Gold serves as a safe asset, and its demand has risen, particularly since the onset of the Russia-Ukraine conflict in February 2022. With inflation and market volatility on the rise, experts suggest that gold will remain a reliable investment option. Further, the appeal of gold exchange-traded funds (ETFs) has grown as they are now subject to a long-term capital gains (LTCG) tax of just 12.5 per cent if held for 12 months.
According to the World Gold Council (WGC), consumer sentiment during the festive and wedding seasons (November to February) will maintain momentum in gold purchases. But financial experts always advise to maintain only a maximum exposure of 5-10 10 per cent in gold, whether physical or through digital options.
