Akshaya Tritiya, the summer festival of India, is associated with wealth and prosperity. The purchase of gold is considered auspicious on this day. While traditionally, the occasion means buying physical gold; in the pandemic-struck world of today, digital gold investments options can be explored.
But before that, let's find out if it is right to buy gold in the current situation?
Over the past few weeks, according to Chief Product Officer of Market Pulse, Arshad Fahoum, gold prices have largely been in a consolidation phase and are hovering around their 52-week lows which makes it a good time to invest.
Given the unfortunate resurgence of COVID-19 in India, Fahoum believes, financial markets can be expected to feel some pressure which can further assist gold prices in the near term.
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Chintan Haria, Head of Product Development and Strategy, ICICI Prudential AMC is also positive on gold given its relative valuation with equities and uncertainties being witnessed in the debt market.
Keeping in mind global central banks' policies, he thinks that a spike in inflation is likely and since gold acts as a hedge against inflation, investors can consider around 10 percent allocation to gold in their portfolio.
So, what are the options to explore?
Fahoum thinks that gold exchange traded fund (ETF) is a good option now.
"Investments can be made as per the investor’s financial comfort as Gold ETF units come in various denominations. Also, Gold ETFs are highly liquid compared to physical gold. It can be held in dematerialized form and can be traded on the exchange as easily as stocks. Physical gold is also accompanied by storage costs and design and making charges in case of gold jewellery; which is not the case with investments in a Gold ETF," he suggests.
Gold ETFs, as Fahoum explains, invest in gold bullion which is as good as investing in physical metal, but is held in electronic form.
An investor may buy as low as one unit and the expenses associated is much lower when compared to physical gold investments.
On the other hand, gold mutual funds could also be explored by people.
For gold MFs, there are asset management firms who purchase gold on investors' behalf through exchange-traded funds (ETFs). The value of these funds is determined by way of Net Asset Value (NAV), which is disclosed at the end of trading hours.
Disclaimer: The views and investment tips expressed by experts on CNBCTV18.com are their own and not that of the website or its management. CNBCTV18.com advises users to check with certified experts before taking any investment decisions.
