Dhanteras & Gold

Dhanteras, marks the starting of the festivities of Diwali in India.

 

Diwali is one of the most celebrated festivals in India wherein devotees gear up for the reception of the Goddess of Wealth – Ma Laxmi. The Celebration starts with Dhanteras which is considered an auspicious day for buying new things.

 

Buying of Gold and silver are considered the most favorable ones, to appease the goddess and bring her blessings.

 

Gold as an Investment

 

Gold is one of the most popular precious metal since centuries. It can be passed on from one generation to other. It is also used for making jewellry and has a consumption value.

 

Gold is close to heart of Indians as we can attach gold to following  values

 

• Emotional value : Weddings in India cannot be imagined without Gold. Gold Jwellery is an integral part of Indian married women.
• Investment Value : Gold is an important asset and preferred as a hedge against inflation and as a safe heaven in case of economic uncertainties.
• Consumption Value : Indians wear gold ornaments in daily life. It is a product for self consumption as well as for giving gifts.

 

Pros and Cons of Different Investment Options

Recommendation

 

Investment in Gold should not exceed 10% of your Portfolio. Invest on the auspicious day, for a long term as the price of the yellow glittering asset is around it’s peak.

 

Invest in Sovereign Gold Bonds which will yield you yearly interest of 2.5% (taxable) apart from the Tax free Capital gain at maturity.

 

The Bonds can be transferred or gifted to relative/friend who fulfill the eligibility criteria. The bonds can also be used as collateral for loans from Banks/NBFC’s. TDS provisions are also not applicable on the bond interest payments.