Why is this a good time to buy gold

Yes; Ukraine, given the global economic backdrop of war-induced inflation and rate hikes by global central banks to cool retail prices from food to fuel and electricity. Dollar-denominated assets fall when the dollar strengthens, with importers paying more to buy the same amount as demand falls. However, with the US Fed raising interest rates at the fastest pace in nearly three decades, other currencies such as the rupee, euro, sterling, etc. are also falling sharply. This means that gold denominated in other currencies is outperforming dollar-denominated gold, which is protecting the returns.

How has gold performed against equities?

Gold has given 68.6% returns in five years as against Nifty’s 73.2%. However, in the past one year, gold has outperformed the Nifty, giving a return of 5.5 per cent against a negative 3.3 per cent. The one-year returns are partly driven by a weaker rupee, which makes imports costlier. The rupee has returned minus 11.2 per cent year-on-year against the dollar. Demand for gold remains intact as weddings and occasion-based consumption (Akshay Tritiya and Dhanteras) turn sticky. Furthermore, the total number of demat accounts, though growing rapidly, is just 102.6 million for a population of 1.4 billion.

How much gold does India import every year?

India imported an average of 842 annually during the calendar 2017-2021, Metal Focus data show. Indians consumed 771 tonnes in 2017, of which 602 tonnes were in demand for jewellery; Bar and Coin demand the rest. Demand in 2018 was 760 tonnes; 691 tonnes in 2019; 446 tonnes in the Covid affected year of 2020; 797 tonnes in 2021 and an estimated 804 tonnes this year.

What are the ways to invest in gold?

Physical investments are in the form of coins and bars. Since 2015, the government has re-launched the Sovereign Gold Bond (SGB) scheme with a tenor of eight years (allowing early redemption after the fifth year) to reduce non-productive investments in physical gold. Apart from gold ETFs, gold is another investment option. on the country’s valuable foreign exchange reserves. Paper Gold like SGB offers 2.5% p.a. interest on the initial investment amount and redemption on the average closing price of the last three business days.

Is gold a good resale value?

During high inflation and financial crisis, one can normally sell jewelery at a discount of 5-7% from the market price. Convertibility makes gold an attractive investment for many lower and middle class Indians. Another option is to take loans against gold from NBFCs such as Muthoot Finance and Manappu-Rama Finance, apart from authorized banks. The base rate of interest for Manappuram is 14%. However, depending on how high the value of the loan is, an additional interest of 3-12% over the base rate may be charged for loans with tenures of three months.