Are you planning to buy gold on Dhanteras? If yes, there is something that may interest you. Gold as an investment option has delivered over 20% returns since the beginning of this year. Price of spot gold (24 karat) in Kolkata stood at Rs 38,925 per 10 gm today compared to Rs 32,300 on 29 December 2018, which makes gold among the best investments this year.
The price of gold rose Rs 6,625 per 10 gm translating into 20.51% returns, surpassing gains clocked by benchmark indices Sensex and Nifty during the period.
While Sensex rose 8.96% or 3,230 points to 39,298, Nifty gained 7.36% or 799 points to 11,661 points since the beginning of this year. Gold rate also outperformed returns against highest fixed deposit rates for 1 year.
Currently, IDFC First Bank gives among the highest (8%) interest on FDs for one year. When we compare returns from gold to mutual funds since the beginning of this year, gold has convincingly surpassed returns from MFs. Among large cap MFs, Axis Bluechip Fund-Direct Plan (growth option) clocked the highest return of 11.37% during the period.
The midcap funds which have been reeling under huge losses for two years were no match for returns from the yellow metal. Axis Midcap Fund (Growth) managed to generate the maximum 6.07% returns during the period.
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Among small caps too, Axis Small Cap Fund - Direct Plan (Growth option) clocked the maximum 10.50% gains in 2019. Gold is a safe haven for investors and its price often shoots up during times of uncertainty. In September, gold prices touched a six-year high of Rs 40,000 per 10 gram on sharp escalation in the US-China trade war as investors rushed for safe-haven assets.
The uncertainty on the US-China tariff war front, volatile oil market, the bleak global market scenario and murmurs of a recession all fuelled demand for this safe haven asset.