Although gold will see a demand related to weddings during the festive season, the yellow metal in physical form may not be the preferred choice for the people. Dhanteras And Diwali Bankers and business analysts say that to bring prosperity to their homes.
Instead, those looking to invest in gold may look to gold exchange-traded funds, as there is a need to worry about risk factors such as theft, purity issues, liquidity and storage costs associated with holding the metal in physical form. There is no need of.
After the pandemic, people are looking at instruments that can be sold immediately to generate cash in case of an emergency, and gold ETFs can be sold at any time during trading hours on exchanges.
Also, many Indians who have not been able to enjoy a holiday for more than a year and a half due to Covid-19 can usually enjoy the holidays this festive season instead of using the money for gold purchases.
“As covid Restrictions are being withdrawn, people want to leave their homes and go on holidays. They want to spend money on that,” said Shekhar Bhandari, president and business head of global transactions and precious metals at Kotak Mahindra Bank. “At the same time, the general mindset of the people is changing. They will buy some white goods which they wanted to buy for the beginning of the festive season. Also, 2021 is not the year of gold. This is the year of equity. Gold has not given positive returns in 2021 and returns only drive demand.” He added: “In this festive season, people will invest some part in holidays, equities, white goods and gold.”
Bhandari said that this year there will be a demand related to marriage. And, this is expected to be quite significant as many weddings have been postponed due to the second wave of Covid-19 since the beginning of this year.
Gold trade analyst Bhargava Vaidya said it is always better to invest in sovereign gold bonds or gold ETFs. The physical gold market operates at different prices in different geographic locations. In addition, the buying and selling rates are different to cover the liquidation and other costs incurred in trading physical gold, he pointed out.
Globally, gold ETFs account for 35% of total gold demand, compared to the 8% seen a decade ago. Retail investors in India are also enthusiastic about gold ETFs, which can be confirmed by the three-fold increase in the number of gold ETF folios in the past one year.