In a couple of days it will be Dhanteras, followed by Diwali, sparking buying in Gold. The yellow metal has been a stellar performer among asset classes since the beginning of the year and has returned over 20 per cent since January 1. If you are considering buying gold as an investment, is this a good time to lock your investments in the metal?
Market experts believe that those who are looking to invest in gold should go ahead with their investment. It could, in fact, work as a year systematic investment plan (SIP) around these festivals.
“Buying on Dhanteras for a large number of Indians is actually like an SIP (systematic investment plan) and, therefore, we would suggest that this is a good time to invest in gold,” Vijay Jain, CEO and Director, ORRA, a leading jewellery outfit, told FeMoney.
Jain says that in addition to being an auspicious occasion, independent of whether you are a jewellery buyer or a bullion buyer, the choice and variety is really large. “Gold, in fact, has been growing over the last 15 years. The increase in gold prices has been over 13%+ per annum in the last 15 years,” Jain pointed out.
Jain said going forward he feels gold prices would be on an upmove. “The first half of the year has seen a surge in pricing and this has largely been driven by significant growth in ETF’s, while the demand for gold in jewellery has been slow. We believe going forward over the next 12 months, demand for gold jewellery will improve specially in countries like India on the back of a good monsoon,” he said.
At the beginning of 2016, gold price in the domestic market stood at around Rs 25,070 per 10 gram, while it closed at Rs 30205 per 10 grams on October 25, as per India Bullion and Jewellers’ Association (IBJA) figures.
Saurabh Gadgil, CMD PNG Jewellers & Director IBJA, agrees with Jain on gold maintaining it upmove. “Gold seems to be picking up considering various political situations across the globe, need-based buying is on the rise as the festive season is approaching.
Dhanteras and Diwali are considered auspicious days to buy gold. It also marks the commencement of the long bridal season, customer’s place their order well in advance and get it delivered on Dhanteras or Diwali as per their requirements,” he said.