Add Spark to Your Portfolio with Gold This Dhanteras

India celebrates Dhanteras on the first day of Diwali, a festival that welcomes Lord Dhanvantri, the Hindu God of wealth, to bring luck and prosperity. On this auspicious day, buying gold and other metal products is considered to be prosperous and is believed to bring wealth all through the year. You can purchase or invest in gold in multiple ways, such as ornaments, coins, bars, gold stocks, gold Exchange Traded Funds (ETFs), Sovereign Gold Bonds (SGBs), etc. However, before investing in gold, it is important to know about the current and future demand prospects of gold.

Demand Trend

Gold (yellow metal) is an important cultural object in India, valued as a store of wealth and prestige as well as an essential component of numerous customs. The demand for gold surges not only on Dhanteras and Diwali but also during other regional festivals like Akshaya Tritiya, Pongal, Onam, etc.

During Q3 2023, demand for gold in India stood at 210.2 tonnes, reflecting a rise of 10% against demand in Q3 2022. The total jewellery demand for Q3 2023 rose by 7% to 155.7 tonnes versus 146.2 tonnes in Q3 2022. Furthermore, gold imports witnessed a notable growth of 19% to 220 tonnes in Q3 2023 against 184.5 tonnes in Q3 2022. 

While investing in gold coins, bars, and jewellery are popular ways, you can also consider alternative gold investments to avoid storage hassles, doubt about purity, and enjoy tax benefits. Let us now discuss these alternative gold investments that you can add to your portfolio this festive season:

1. Gold stocks: If you are comfortable with high risk in return for attractive returns, you can consider parking your money in gold-related stocks such as Titan, Rajesh Exports, PC Jeweller, etc. Based on the company’s performance, you can generate decent returns in the long run with the help of the compounding effect. You can check for further information on gold stocks on the Angel One app.
2. Gold ETFs: Gold ETF is an exchange-traded fund (ETF) that tracks the domestic physical gold price. These are passive investment tools that invest in gold bullion and are based on gold prices. Investing in gold ETFs comes with benefits like guaranteed purity of the gold, liquidity, etc.
3. Sovereign Gold Bonds (SGBs): If you are an investor with a low-risk appetite, SGBs could be a good fit for your portfolio. Sovereign Gold Bonds (SGBs) are like a way to buy gold from the government. Instead of getting physical gold, you pay for these bonds in cash, and when they mature, you get your money back in cash.  In addition, the risks and costs of storage are eliminated. SGBs bear interest of 2.50% (fixed rate) annually on initial investment. The amount of interest generated will be credited semi-annually to your bank account.

Conclusion

Generating wealth is not an overnight process; it is a long-term journey. You can enhance this journey with the help of diversification of your portfolio with multiple asset classes. Among other assets, you can consider adding gold to your portfolio as it acts as a hedge against inflation, rising demand, tax benefits, etc. If the above investments interest you, open a demat account with Angel One today.

Disclaimer: This article has been written for educational purposes only. The securities quoted are only examples and not recommendations.