Gold price in India may hit Rs 45,000 mark! Here is experts' strategy for maximum returns

January 18, 2020

Mumbai (Jan 18)  Gold prices have scaled to its all-time high in the last fortnight and bullion experts are of the opinion that the precious metal may hit Rs 45,000 per 10 gms in the year 2020. However, if we go by the experts' view, it's better to invest in electronic gold than to invest in physical gold. Majority of the tax and investment experts are of the opinion that one should invest in Gold ETF or Gold Bonds as it can be liquidated as and when an investor wants without finding a buyer as the asset management company would be the buyer whom they can sell at the current market price electronically.

Speaking on the gold price rally, Anuj Gupta, Deputy Vice President — Commodities and Currencies at Angel Broking said, "The gold prices have gone up by $21.28 per ounce today in the international markets touching its life-time high of $1,605 per ounce. This gold price rally is expected to continue till January end as the US-Iran crisis may get prolonged till January end." Gupta said that in short-term gold price may hit $1,630 per ounce while in the long-term or in the next six months, the gold price may touch $1,700 per ounce"

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Asked about gold price prediction from the Indian perspective, Anuj Gupta of Angel Broking said, "Gold price in the Forward Markets may hit Rs 43,000 per 10 gms in short-term while in the next six months, we may witness gold price escalating up to Rs 45,000 per 10 gms."

Elaborating upon the gold investment strategy Manikaran Singh, a SEBI registered investment expert said, "Gold ETF, Gold Fund or Gold bond is better than physical gold because it's easier to liquidate without any storage problem which a physical gold holder comes across. However, the gold investment should be for the long-term, say twenty or above years as the returns on it would be in sync with the gold price appreciation in the spot market." Asked about the form of investment in electronic gold Manikaran Singh said that an investor can invest in Gold ETF or Gold Fund even in the SIP (Systematic Investment Plan) mode and it would give almost the same returns as an investor can get in normal Mutual Funds SIP available in the market. Manikaran again maintained that the return he said is for the long-term.

Commenting on the taxes involved in the gold investment Kartik Jhaveri, Director — Wealth Management at Transcend Consulting said, "All taxes that are involved in the physical gold is being levied on Gold Fund and Gold ETF investment. However, in the case of Gold Bonds, the Long Term Capital Gain (LTCG) is exempted but the Gold Bond is not always available for investing. It is launched by the Government of India when it needs to generate money from the market at cheaper rates." Kartik Jhaveri said that Gold Bond is not an investment. In fact, it's a loan that the Government fo India takes from the public in general. Gold Bond is subject to lock-in and it has a maximum investment limit. Since investment is a regular process, it's not advisable for an investor to wait for the Gold Bond keeping its money choked. So, if an investor has surplus money in its portfolio, he or she can invest that into the Gold ETF or any other Gold Fund for the long-term.


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