Diwali, the festival of lights, is a time for celebrating the triumph of light over darkness and embracing financial prosperity and investment in India. Gold, a timeless and cherished asset associated with wealth, beauty, and cultural significance, plays a central role in this pursuit. Investing in gold during Diwali is a cherished tradition, deeply ingrained in our culture and customs, symbolizing not only financial security but also enriching the tapestry of Diwali rituals, especially for women. Gold adorns deities in temples and is exchanged as jewelry gifts, emphasizing its enduring presence and significance in the celebration of both light and prosperity.
As the auspicious festival approaches, it’s a good time to consider the best ways to invest or purchase gold, taking advantage of its intrinsic value and cultural symbolism. Palka Arora Chopra, Director, Master Capital Services Ltd suggests the best ways to invest in gold:
- Physical GoldMany people choose to invest in tangible gold during the festive season by purchasing gold coins and jewelry. But when buying gold, you need to be extremely careful about its purity because even a small mistake may cost you a lot of money. It is advised to select 22K carat gold jewelry during Dhanteras. One can also purchase 24K gold coins, which are the finest type of gold. It’s important to understand the additional expenses involved in purchasing real gold, such total tax paid by a gold buyer in India is currently 18%, which includes basic customs duty, agriculture infrastructure cess, GST and the 5% manufacturing charge, since these factors add up and impact the final cost.
- Digital GoldInvesting in gold can now be accomplished digitally, eliminating the requirement for actual possession of the precious metal. The allure of digital gold lies in the fact that it is 24k gold that has been verified by government-approved organizations to be 99.5% pure. Your investment’s quality is guaranteed by doing this. It also makes gold extremely liquid. Digital gold is simple to buy and sell, providing a flexible and approachable way to invest in gold.
- Gold ETFGold ETFs also known as Exchange-traded funds are financial instruments whose prices are intended to mimic those of real gold on local markets. These passive investments are supported by high-purity gold bullion and are correlated with the value of gold. A gold ETF’s units each correspond to one gram of real gold. Investors may easily obtain exposure to the gold market through these exchange-traded funds (ETFs), which function similarly to stocks and eliminate the need to purchase and hold real gold. Gold ETFs provide a simple, liquid, and easy alternative for people to invest in gold and easily track the performance of the precious metal.
- Gold Mutual FundsGold funds are the ideal choice if you want to invest in digital gold, which is reliant on the stock market. Customs duty, manufacturing fee, and GST are not applicable. Investing in gold funds is similar to investing in exchange-traded funds (ETFs).
- Sovereign Gold Bonds (SGBs)An alternative to owning actual gold is to hold Sovereign Gold Bonds (SGBs), which are government securities valued in grams of gold. In exchange for cash, investors pay the issue price and cash redemptions at maturity for these bonds, which are issued by the Reserve Bank on behalf of the Indian government. The investor receives an annual interest rate of 2.50% from the government. Both the interest and the real cost of the gold are paid by the government when the investment matures. Making charges, GST, and customs duty are not owed by the investor.
In conclusion, the tradition of buying gold is closely related to Diwali. People may engage in this activity in a number of ways, including digital gold, physical gold in the form of coins and jewelry, gold ETFs, gold mutual funds, and sovereign gold bonds. These choices, which represent the eternal importance of gold in the quest for light and riches, not only enhance the cultural fabric of Diwali but also provide financial security.
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