Akshaya Tritiya 2024: Gold jewellery or digital gold – which is the best choice?
Akshaya Tritiya 2024: Akshaya Tritiya, a significant spring festival for the Hindu and Jain communities, is being celebrated today across the country. Buying precious assets, including gold, on this day has cultural significance. Traditionally, people have been buying physical gold on Akshaya Tritiya every year, but with each passing year especially in the wake of the arrival of new ways of gold investment, this pattern has been changing slightly.
With multiple gold investment options available beyond traditional gold jewellery items and coins now, more and more people have started exploring investment options in products like sovereign gold bonds (SGBs), gold ETFs, gold mutual funds, etc. Here are some of the factors people should consider when deciding between purchasing physical gold in the form of jewellery or coins and investing in digital gold, according to Ganesh Balakrishnan, Co-Founder, Aurm (an asset protection firm).
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Digital Vs physical gold buying – Factors need to be considered
Some factors to be considered while deciding on purchasing digital versus traditional gold jewelry include its purpose – as an investment, utility and gifting, he said.
Buying digital gold is purely an investment decision, buying physical gold jewelry goes beyond investment.
Traditional gold jewelry also has utility as ornaments for special occasions. Gold jewelry is a meaningful gift to your loved ones, especially when gifted on Akshaya Tritiya.
“Family customs and traditions are also important factors to consider. Many Indian households have a family tradition of buying jewelry on Akshaya Tritiya, where mothers and daughters go together to the store. The joyous experience that binds the family together is cherished by everyone in the household,” Balakrishnan said.
Current economic climate and market trends for gold
On whether the current economic climate and market trends will influence the decision-making process for individuals looking to either buy gold jewelry or invest in digital gold this Akshaya Tritiya, he said the current economic climate is uncertain, where developed countries are entering an economic depression, and conflict in various parts of the world is affecting the public markets.
In such an environment, buying gold is a safe investment alternative, and this reflects in the all-time high price of gold in recent times, he added.
“Digital gold has higher liquidity than physical gold, and hence people’s own economic situation should dictate the buying decision. If they need liquidity in the near future, buying digital gold is a good option. If they are investing for the long term, physical gold can be a preferred option,” Balakrishnan explained.
Advantages and disadvantages of digital gold
Sharing his thoughts on long-term investment perspective, he underscored potential advantages and disadvantages of opting for digital gold over traditional gold jewelry on Akshaya Tritiya.
Both digital and traditional gold have their own unique advantages and disadvantages. The gold value appreciation is the same regardless of which option you choose.
“Digital gold offers better liquidity whenever needed. From a long-term perspective, physical gold is an attractive option since the traditional jewelry can be used regularly by family members, and can also be passed on as inheritance,” Ganesh Balakrishnan said.
There are avenues for secure storage of gold jewellery as well as digital gold documents, such as bank lockers and home safes, he said adding that there is however a significant shortage of bank lockers, with 6 lakh lockers available for 6 crore Indians who have gold assets to safeguard.