Why Invest in Gold this festive season - outlook, need, right way to invest; expert decodes | Check rates in your city on October 16
Gold Price Today: At 10:00 am, Gold December's future is trading at Rs 50,280 down by 1.19 per cent. Likewise, Silver December's future was also trading in red below 3 percent. The precious metal was down by 3.24 per cent at Rs 55,290.
Gold Price Today: Festive season has already started, and Diwali is around the corner. Buying gold during festive occasions is like Indian tradition and consider auspicious as well. And hence, the demand for Gold during this festive time shoots up. But is that the right way to invest in Gold? Here's what the expert Zubin Daboo - Head Marketing Epsilon Money Mart suggested:
Why to invest in Gold?
According to Zubin Daboo, before understanding the right way to invest in gold, it is important to take a step back and see why one need investment in Gold? "There are those who believe that one needs to diversify at least 5-10% of their portfolio, depending on their asset allocation in the yellow metal," he said. The main reason for this is that gold is expected to be ‘inversely proportional’ to equities. This basically means that when equities go down, the price of gold tends to go up and vice versa, he added.
What is the ‘Right’ Way to Invest in Gold?
According to the expert, the more efficient way to buy Gold is either through Gold Exchange Traded Funds /Gold Fund of Funds issued by various mutual funds or the RBI-issued SGBs or Sovereign Gold Bonds. He said "Gold ETFs have been around since 2007 and since then most major fund houses are offering Gold ETF options for investors to take advantage of."
Gold ETF scores over physical gold in the following ways:
- Safety: Since the Gold owned is ‘virtual’ there is no chance of theft or worries about storage
- Every unit you buy is backed by physical gold that the mutual fund will purchase and store at their cost.
- Purity: The Mutual Fund clearly states that the Gold it will buy will be of a certain fineness, and must ensure, through audits, that the Gold they buy is of the purity. Hence you can be certain of the purity of the gold that backs each unit of the ETF you own.
Another way to invest in Gold, according to the expert Daboo, is through Sovereign Gold Bonds or SGBs.
Sovereign Gold Bonds are issued by the RBI, making it a transparent and trustworthy investment option. Since it is a paper-based instrument, there is no risk of theft or cost of storage, just like an ETF.
Gold Price Today
At 10:00 am, Gold December's future is trading at Rs 50,280 down by 1.19 per cent. Likewise, Silver December's future was also trading in red below 3 percent. The precious metal was down by 3.24 per cent at Rs 55,290.
Gold rates city-wise today, October 16, for 22 Carat:
Chennai : Rs 46,900
Mumbai : Rs 46,200
Delhi : Rs 46,350
Kolkata : Rs 46,200
Bangalore : Rs 46,250
Hyderabad : Rs 46,200
Kerala : Rs 46,200
Ahmedabad : Rs 46,250
Lucknow : Rs 46,350
Patna : Rs 46,230
Chandigarh : Rs 46,350
Bhubaneswar : Rs 46,200
(Disclaimer: These are indicative prices collected from trusted sources. Investors are advised to check prices with their jeweller before investing/purchasing.)
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