With nearly a week left for Dhanteras, demand for gold is likely to surge amid the festive season. Over the years, gold has also shined as an investment option. During the last 25 years, price of gold has risen by over eight times. In 1994, gold price traded around Rs 4,598 for 10 gram. It has risen to Rs 39,000 per 10 gram now translating into returns of over 748%.
With Rs 2.5 lakh in 1994, one would have purchased Rs 543.8 gm of gold. The price of the same quantity would have increased to over Rs 21 lakh now. In September, gold prices touched a six-year high of Rs 40,000 per 10 gram. Gold prices on Thursday declined by Rs 105 to Rs 38,985 per 10 gram in the national capital on a stronger rupee and weak global cues, according to HDFC Securities.
"International gold prices traded weak on Brexit hopes and the US-China trade deal optimism," HDFC Securities Senior Analyst - Commodities Tapan Patel said.
More and more people have been picking gold as an investment option, as it has emerged as proven 'hedge' against inflation. It also helps in securing loans in tough times.
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Gold can also be included into one's portfolio since the yellow metal has been found to be performing well when returns from equity markets have diminished.
With gold emerging as an evergreen option for investing, here's a look at various routes to buy yellow metal.
One can buy gold from jewellery shops but there concerns in this case about safety, high costs and outdated designs. This involves making charges which are typically in range of 6% to 14% of the cost of gold. But when you sell that jewellery, these charges are irrecoverable.
Gold coins, bars and jewellery can also be bought online. The product is offered on the mobile wallet platform of Paytm. You can also invest in Me-Gold, a digital gold online investment by Motilal Oswal.Sovereign Gold Bonds (SGB)
You can also buy Sovereign Gold Bonds for owning paper gold. They are issued by the government. The government opens a window for the fresh sale of Sovereign Gold Bonds to investors although irregular intervals. The window remains open for about a week. For those who want to buy these bonds anytime in between, the only way is to buy earlier issues at market value.
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One can also buy gold coins from jewellers, banks, non-banking finance companies, and now even e-commerce websites.
Gold savings schemes
Gold or jewellery savings schemes are also among routes to invest in gold. One can deposit a fixed amount every month for the chosen tenure with a jeweller. At the end of the tenure, you can buy gold equivalent to the total money deposited, including a bonus amount. The conversion is done at the gold price prevailing on maturity.