Akshay Tritiya 2024: Gold Stocks in Focus

Akshay Tritiya, also known as Akha Teej, is an auspicious festival in Hindu and Jain cultures, celebrated with much fervour across India. Investing in gold on Akshay Tritiya is not just a cultural practice but also a financial strategy deeply rooted in Indian tradition.

From an investment perspective, gold continues to be a favoured asset due to its intrinsic value and its role as a diversifier in investment portfolios. Its price tends to move independently of other assets like stocks and bonds, providing a buffer during market volatility. Moreover, gold is a global currency that holds its value across borders, making it a reliable store of wealth.

The ritual of buying gold on Akshay Tritiya has evolved with time. While traditional purchases involved jewellery and gold coins, today’s investors are also exploring other forms, such as gold ETFs, gold stocks, sovereign gold bonds (SGBs), and digital gold. These modern forms of gold investment offer the benefits of owning gold without the hassles of storage and security concerns associated with physical gold.

Retailers and jewellers across India offer special promotions and discounts on Akshay Tritiya, making it an even more attractive occasion for gold purchases. The surge in demand often leads to a temporary spike in gold prices, reflecting the collective belief in gold’s auspiciousness and its role as a symbol of wealth and prosperity.

Top 5 Gold Stocks

Note: The above-mentioned stocks have been selected from the Nifty 500 universe and sorted on the basis of 5Y CAGR.

Gold Prices Over Past 10 Years

India is one of the leading markets for gold, and growing affluence is driving demand in the nation. During Q1 CY2024, gold demand (excluding OTC demand) fell 5% YoY to 1,102t due to continued ETF outflows. The gold demand rose 3% YoY to 1,238t, making this quarter one of the strongest first quarters since 2016. The jewellery sector witnessed decent growth on the back of the price rally. Global jewellery consumption was just 2% lower YoY at 479t. Jewellery fabrication grew by 1% YoY to 535t, resulting in an inventory build of 56t during the quarter.

Factors Determining Gold Prices in India

The following factor determines the gold prices in India:

• Global Cues: The global economic instability, development, and rise in the dollar prices against currencies help in determining the gold prices
• Currency Movement: The price of gold increases in India as the value of Indian rupees (INR) declines in relation to the US dollar.
• Fluctuation in Demand for Gold: The demand for gold is another factor influencing the price of one gramme of gold in India. A strong demand will also result in a high price per gram.
• Interest Rates: Last but not least, the current rate and price of gold decline in the event that interest rates in other nations rise. But this also raises demand, which ultimately drives up the price of gold per gramme.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.