In last few months due to global uncertainties like Euro zone debt crisis and US debt crisis, gold and silver prices have sky rocketed. Sometime back, gold was trading at all-time highs around $1,880 per Oz and silver was trading around $45 per Oz. Gold prices might have skyrocketed but gold indeed is the best option to invest in downtimes and due to its liquidity and many other favorable options gold seems to be the only silver lining when market is slipping down to sink. Known as precious metals, gold and silver were once known to be the famous currency for transactions but now hold places for the best economic investment options.
Research shows that over 16,000 tons of gold is there in Indian households predominantly in the form of jewellery. The value of this as per market price is a whopping Rs 27.2 lakh crore ($591 billion). That is close to twice the foreign exchange reserves held by the Reserve Bank of India. Historically, gold has been the perfect hedge for inflation. This is based on data right from the year 1800 AD. Since a decade, pace has accelerated after S&P downgraded US credit rating a few days ago.
Why Gold is good option to invest?
Due to longer and highest liquidity, gold is good to invest for those who are looking for long term investments.
When markets are falling and inflation is riding high, investing in gold is the safest bid. So relax and chillax at you couch and keep investing in this yellow glittering metal.
A 5 per cent of the overall investment portfolio can be considered for gold investments (bullion, WGC coins, Gold ETFs)
Deflation dejects gold, which is rarely seen in India so gold can be hold to invest without risks.
Even when the official figures where showing negative inflation (deflation) during the last year, the actual prices of food items were increasing.
Jewellery loan vouch proofs that gold is the highest liquid-able commodity.
Gold possessions can be exchanged with gold jewels without any major issues.
Gold can be sold any time in the need of urgent cash.
90% of gold traded in India is unbilled and still it faces the toughest tax treatment. So one should consult the jeweler before investing.
But with the per gram price rising, the smallest single investment is becoming higher.
Where to Invest In Gold?
The term ‘investment in gold’ might have clicked in the form of jewellery buying or gold coins buying to many but simply buying these would not assure the proper lucrative investment in gold. To gain the best of gold needs the proper form and investment options with strategies. Let’s have a look at the available and best investment options.
Investment in jewellery should never be taken as investment due to its social status and beautification purposes. Besides that making and remolding charges with the wastage lost in remaking is what makes it not a good option to invest into.
When one thinks of gold coin to escape from the remaking wastage and remolding charges, let’s be informed that coins are also not the best option to invest when it comes to investing as every bank regardless of its government acquisitions charges for its coins anywhere between 5 to 10 %.
World Gold Council Coins are issued by jewelers who are part of the WGC network.
Gold coins also have lesser liquidity and are lesser sell-able at the time of need.
Coins have lesser premium over the market price (1 per cent to 2 per cent) and are redeemed at the market price when one takes them for selling off.
Now when gold jewellery and gold coins are not considered good options to invest where else one should eye for? Well let’s have a look at the best yet unrevealed and less commonly known options to invest in gold.
If investor is looking to buy something then gold bullion bars are the best option to bid. The only drawback of investing in gold bullion bars is that a common man might face problems in investing in heavily rated gold bars.
Gold ETF are made for one and all and are the safest and most lucrative bid to invest in gold. Gold ETC means Exchange Traded Funds which are mutual fund schemes that invest in standard gold bullion (99.5 per cent purity). Special ETFs track the prices of gold and are convenient and inexpensive alternative to owning physical gold.
ü Mutual funds for gold are also the safe options to get one hands on. Due to their easy electronic access, gold mutual funds have the easiest liquidity available.
ü E-Gold and E-silver are unique investment options launched by NSE in gold commodity market.
E-gold and E-silver provide an opportunity for small investors to invest in gold and silver in smaller denominations of 1 gram for gold and 100 grams for silver and in multiples thereof in demat form.
If investor has gigantic plans and finance to invest into gold then one can opt to buy gold mines. The simple lucrative logic attached with buying gold mines is the constantly rising price of gold which will rise and thus the price of gold mines as well.