Unlocking the Golden Opportunity: Strategizing Your Long-Term Portfolio with Gold Investment
We see gold prices are climbing and nearing Rs.70,000 per 10 grams for 24 karat and for 22 karat, which is around Rs 65,000 per 10 grams while the S&P BSE Sensex has reached around 75,000 points. Over the past 12 years, the Nifty 50 index has mostly shown positive returns, except for one instance of a negative return during 2015.
Let us know. Yearly gold returns during the period of 2012 to 2023 are:
27.7%, 6.8%, 31.4%, -4.1%, 3.0%, 28.6%, 3.2%, 12.0%, 14.9%, 24.1%, 4.3%, and 20.0%. This means some years had big gains and some years had small losses, but overall, the investment showed positive growth over the period.
Let’s know the factors that affect the price of gold:
Global market trends
Gold is traded worldwide, and its international supply and demand dynamics influence its price significantly. Factors such as geopolitical events, economic conditions, and currency fluctuations can have a direct impact on the gold rate.
Local demand and supply
Gold is not just a precious metal; it is a cultural symbol and an investment. Demand for gold jewellery, especially during festivals and weddings, can cause fluctuations in the gold rate.
Government policies and regulations
Government policies can have a significant impact on the gold rate in India. For instance, changes in import duties, taxes, or restrictions on gold imports can lead to fluctuations. Gold is often seen as a hedge against inflation, and government policies related to inflation can also influence the gold rate.
Exchange rates
Since gold is priced in US dollars globally, fluctuations in the Indian rupee (INR)-US dollar (USD) exchange rate can affect the gold rate in India. A weaker rupee against the dollar can lead to higher gold prices in India, while a stronger rupee can have the opposite effect.
Investor sentiment and speculation
Market sentiment, trading volumes, and trends in other financial markets can influence gold prices.
How to do Gold Investment?
- Purchasing physical gold jewellery that is at least 99.5 percent pure.
- Gold as a Commodity-Linked Structured Investment.
- Investing in gold Exchange Traded Funds (ETFs) or gold unit trusts.
- Investing in gold mining stocks.
