After reaching record high in March, gold price is showing no signs of cooling anytime soon, offering golden opportunity for smart investors to make good earning.
Gold, a timeless investment is valued for its stability, cultural significance all across the globe. Indians are strongly attached towards gold, mostly it is considered as the first choice as a gift in weddings or other festive seasons. Not only in Indian market, this precious metal holds an allure since ancient times globally to safeguard wealth amidst market fluctuations.
Amid high inflation and increasing interest rates, Gold is performing well in 2024, from investment point of view. Are you also planning for investing in gold? With the rise in price of gold, it's important to know about the investment options on this precious metal.
In this article, we will discuss about things you must know before smart investment in gold.
Many people think that buying gold bar is the only way of investing in gold. This is not true. There are numerous types of gold investment: Gold IRAs, gold ETFs, gold stocks and gold futures. They all have distinguishing advantages and disadvantages. You need to research thoroughly or take an expert’s help before investing in gold. Generally, gold future is not suggested if you are a beginner.
This is a critical parameter to successfully invest in gold. You must check previous track record of the company before investing. Go through financial statement, profits, market shares, revenue, and current news or announcements about the company.
Indian government has numerous regulations in gold industry. From mining, refining to trading, Indian government has different rules. Before investing, understand the probable impact of these regulations on company based on current market scenario.
This is another critical factor to consider before gold investment. Similar to other equity-oriented investments, there are taxation rules for gold stocks. Generally, short-term capital gains (if the gold is sold within a year) are taxed at 15% along with applicable cess. However, long-term capital gains are taxed at 10%, along with applicable cess. On the other hand, long-term capital gain of less than Rs 1,00,000 are exempted from taxes.
These factors play crucial role behind a successful investment. You must consider economic factors like interest rates, inflation, currency fluctuations, and geopolitical scenario for better returns. Always be updated about these influential factors for the performance of gold-related stocks.
As per the market capitalisation, following are some best performing gold stocks in India: Titan company, Muthoot Finance, Kalyan Jewellers India, Rajesh Exports, and Manappuram Finance.
Risk is everywhere, similarly, investing in gold is surely a risky venture. Several factors like market volatility, liquidity issues can impact the performance of gold stocks. So, making a conscious decision can mitigate the risk.
In global gold market, India ranks second in with 25% of the world's total gold demands. Understanding the potential of gold industry, Indian government started an initiative “Make in India in Gold.” This initiative aims to increase the nation's capacity to produce gold-related products, enhance exports as well as stimulate economic growth.
Indian's love for gold made it a timeless asset. However, you must remember that investing in gold is not a conventional income-producer. It's not an instant reward, it takes time. Generally, gold acts as a safeguard against inflation.
