Gold investing for profits will be an interesting choice by investors when stock prices are going down continuously. The Price of 10g (1 tola) of 24k gold (99.9%) in India is Rs 52,330.00 for now, somehow if you compare this price is still low as compared to last month’s prices but still high compared to last year. Before the Corona pandemic, the gold price in India was around Rs 30,000. In the last two years, gold prices have picked a hiked by almost 75%. Gold has been in a bullish run for the last 2 decades. What is the significance? Will gold continue to this type of rising in the future? Is it time for Gold investing for profits? How to Invest in Gold in India as well as the SA?
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Gold investing for profits
Tradionally, many investors shunt gold and invest in equities or fixed income stock markets. With the price of gold performing quite well, a lot of investors are turning their awareness to gold.
The price of gold has topped rs 54,000 per 10g recently. Gold has been in a hike run since 2000.
The pea kin the price of Gold is due to a number of aspects. Some of them help you to decide whether Gold investing for profits is good for now or just stick with the stock trading and investing. Some of them are documented below.
1. International tensions and Bad times
During international tensions and war, gold will always hold its value. Sometimes, investors trade currency for gold In recent Ukraine and Russia war issues, the price of gold was shot up to Rs 54, 000 in fear of oil prices rising. US dollars and inflation (which is on the highest level for now) along with high federal trade deficit and debt have made investors buy gold to hedge against currency fluctuations.
Though now the price is fallen slightly from last month, it believes that gold investing for profits is a good investment tool to use as a safe haven in times of crisis and bad times.
2. Supply and Demand Fundamentals
When the price of gold rise everywhere in the world, more investors will buy gold. Since the supply and production of gold are limited, it will not be capable to keep up with the increasing demand from the market. This will make the price of gold rallying further.
3. Stock Market Bearish vs Gold Market Bullish
Gold has always performed the opposite of the stock market historically. When everywhere in the world, stock markets are performing poorly lately, all gold markets were bullish. With uncertain economic and global necessities, some analysts believe that gold will further appreciate its value and continued its bullish run in long term.
It is never too late for to Gold investing for profits.
There are a few ways to gold investing for profits which are shown below.
1. Gold Jewellery
Gold jewellery is a popular means of investing as savings in developing countries like India and the Middle East.
2. Gold Bullion and Coins
Gold Bullion are gold bars which are available from 1g to 400g. Gold coins are the legal tender of issuing countries and normally sell at a small premium above the current spot gold price. Popular investment grade coins (Investment Grade Coins are just one step away from Rare Coins) are US Eagle, Canadian Maple Leaf,
3. Gold Certificates or Accounts
These are ownership rights to gold bullion held by a financial institution such as a central bank for safekeeping.
4. Gold Mining Stocks
These are stocks of gold mining and exploration corporations. When the price of gold rises, some mining stocks propose handsome dividends when the issuing companies profit.
5. Gold Mutual Funds
These gold mutual funds are funds that have gold in the portfolio managed by experienced fund managers. Some funds are region specific (such as in the US) or spread across further mining companies.
Also Read: What are the risks of not investing?
6. E-Gold Investment
E-gold is the procedure of buying gold electronically. To invest in E-gold, one should have a Trading Account with specified NSEL dealers. E-gold units can be bought and sold through the exchange platform (NSE) just like shares. Here one unit of e-gold is equal to 1 gram of gold purity of 99.99%.
No matter what type of instruments you choose to invest in, you have to mix your portfolio with the right proportion of your equities. The strategy for gold investing for profits is to have a balanced portfolio with diversification. The objective is to use gold investing for profits as a hedge against fluctuations in the fixed income market. The best strategy is to start with an 8-13 % level of your portfolio to invest in gold and slowly vary your level of gold to increase your portfolio stability.