Gold Buying Rate Today
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Gold Buying Rate Today
Given how volatile the commodity is, the second approach according to him is to invest whenever there is a smaller correction in gold in order to reduce the overall buying price of your gold product.
Indians are more attuned towards buying physical gold hence, one should not time the markets to buy physical gold as the need to purchase is based on the desire and need of the individual, says experts.
Jaydeep Banerjee, the co-founder of Dvara SmartGold, believes a typical practice prevalent amongst gold-buying investors is that when prices are 7% to 8% higher than the highest price in the short term, they buy.
For Indians, he suggests they keep investing in the pure form, possibly mainly buying digital gold, on account of inherent flexibility and availability of appropriate denominations and submit to long-term commitments to see real value growth.
Over the last two years, central bank purchases have more than doubled, led by China, Turkey, and India. Traditionally, when the gold price dips, central banks stock up. As compared to 450 metric tonnes of gold in 2021, their purchases rose to 1,136 metric tonnes of gold in 2022 hitting an all-time record of gold buying by central banks on the back of geopolitical uncertainty and high inflation.
He suggests sovereign gold bonds as a good option to invest in the commodity without the hassle of buying physical gold. To invest in SGBs, an investor needs to buy them in the secondary markets (NSE and BSE) via their demat account.
Household demand for gold is fuelled by the demand for gold jewelry or other physical forms of gold purchases such as bars and coins. India is among the top physical gold buying countries. When the demand dips, supply increases, weakening the price of gold.
The best way to buy and sell gold coins and bars is via jewelers, bullion traders or government-backed institutions such as the MMTC. You must check the hallmark on the gold coins and bars before buying.
Sovereign gold bonds are considered better investments than physical gold as purchase of these bonds attracts lower costs and better annual returns. Investors are paid an assured interest rate of 2.5% semi-annually. Upon redemption of SGBs, interest paid to the investor is taxable while the capital gains upon maturity of these are tax-exempt for individual investors. This tax exemption is not applicable for trusts, however. Click the following link to read our guide on how to buy sovereign gold bond.
With digital gold wallets, users can download the mobile applications of the gold wallet provider and invest as low as INR 1 in the gold wallet through various online fund transfer facilities. This is similar to buying INR 1 gold.
The availability of gold in different cities varies and in most cases, gold needs to be transported to different cities for sale. This transport cost is passed on to the consumer resulting in different rates across the country.
Other factors may include instances when previously-purchased gold at lower value being sold in a city is on offer at a lower rate compared to the same amount being sold in another city. The jewelry associations of different cities may also end up influencing the final rate at which gold is being sold on a particular day.
Investing in gold in the digital format could help you do away with costs that may eat into your returns. These costs include locker charges, GST on making charges and purchase/sale among others. Some common ways of investing in digital gold include buying SGBs, investing in gold via ETFs and trading on future prices of gold.
When high inflation is clubbed with a high interest rates scenario, gold may not end up being considered the safest commodity to invest in. This is because when interest rates are hiked, investors begin participating in currency-led assets (which hold promise for positive returns) as opposed to investing in gold.
Physical goldThe current GST rate for buying and selling physical gold stands at 3%