Akshaya Tritiya 2024: Analysts advise caution on gold buying
Echoing the same, Umesh Mohanan, ED & CEO, Indel Money, says the elevated gold prices in the domestic market may marginally impact yellow-metal’s demand during the festive season. “There may be a decline in the volume but in value terms the business may not see a significant downfall. In India, gold jewellery is primarily an investment and every year people try to buy a bit of it, however small it may be, as they value it much more than any other investment.”
Mohanan further says there are other reasons to buy the yellow metal. “The cultural and aesthetic values of the precious metal persuade Indian households to buy gold irrespective of whether the economy is doing good or bad. Gold loan is fast emerging as a viable loan option, which further enhances the liquidity of the yellow metal.”
On the other hand, CA Krishnan R, Director & CEO, Unimoni Financial Services believes that customer demand for gold tends to rise during Akshaya Tritiya, as it is considered a lucky day for purchasing gold and jewellery. “While Gold jewellery has cultural significance and has a store value, it is essential to weigh the pros and Cons before buying gold. Though gold is considered a good investment against inflation and provides immediate liquidity, it does not provide consistent returns like stock or bonds and also has costs associated with storage.”
Krishnan says that buying ‘gold ornaments’ may not be advisable as investments considering the additional cost of making ornaments. Instead, gold bullion coins can be purchased.
Meanwhile, Deveya Gaglani, Senior Research Analyst – Commodities, Axis Securities expects gold prices to touch ₹77,000 by the next Akshaya Tritiya (2025), as investors may flock towards yellow metal due to uncertainty in the global market. “It is advisable to invest in Gold ETF, Gold sovereign bond, and Gold Bees instead of physical Gold to avoid storage, theft, or purity risk,” says Gaglani.
Gold has been an attractive investment asset for investors across the globe, including India, due to its outstanding return of more than 50% compound annual growth rate (CAGR) in the domestic market over the last two and a half years. It recently reached historic levels of ₹70,000 in India, mainly due to geopolitical tensions and Central Banks’ accumulation of Gold reserves, which have outweighed the hawkish stance adopted by the U.S. Fed officials this year.
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