As gold prices hover around ₹70,000 per 10 grams in India, a pertinent question arises: Will consumers buy gold this Akshaya Tritiya amid these high rates?
Commenting on the same, Colin Shah, MD at Kama Jewelry said that a double surge of momentum is expected this year during Akshaya Tritiya.
He attributes it to the sentimental value attached to gold and the favorable timing of investments.
Shah noted a shift among younger buyers, who are increasingly investing in gold for decorative purposes.
In the long term too, experts are optimistic about gold prices as well as investments.
Aditya Agarwala, co-founder and head of research and investment at Invest4edu, said he could see gold moving north after a cooling-off period.
Here are the key factors expected to support demand for precious metals (as Agarwala highlights):
Geopolitical tensions
The constant conflicts in the Middle East and European countries will keep gold prices high as it is considered a safe haven.
Slowdown of global economies
A weaker global economy and persistent inflation will further boost demand for gold.
Higher interest rates
If interest rate cuts are smaller than expected due to high inflation, money from stocks will flow into gold and silver.
The table below shows the average annual price of gold (24 carat per 10 grams) in India from 2014 to date, providing an overview of historical trends:
| Year | Price (24 carats per 10 grams) |
|---|---|
| 2014 | ₹28,006.50 |
| 2015 | ₹26,343.50 |
| 2016 | ₹28,623.50 |
| 2017 | ₹29,667.50 |
| 2018 | ₹31,438.00 |
| 2019 | ₹35,220.00 |
| 2020 | ₹48,651.00 |
| 2021 | ₹48,720.00 |
| 2022 | ₹52,670.00 |
| 2023 | ₹65,330.00 |
| 2024 (until May 8) | ₹70,500.00 |
(Source: Invest4edu)
Investment Considerations
Experts believe that investing in gold is now a wise choice.
“Investing in gold brings stability and good returns despite the risks. Even though Indian stocks are booming, they come with uncertainties. To protect against rising prices, gold is a wise choice. On Akshay Tritiya Day, a lucky day for buying gold, consider investing in gold “Despite the recent ups and downs, gold continues to hit new highs, which shows. “It’s a safe bet in today’s market,” Kresha Gupta, founder of Chanakya Opportunities Fund, told CNBC-TV18.com.
Brokerage firm Motilal Oswal also advocates a positive outlook for the yellow metal.
He recommends buying the metals on dips with targets set at ₹75,000 per 10 grams of gold on the domestic front and $2,450 per ounce on the Comex.
Longer term.
In addition to traditional gold purchases, digital gold options like gold ETFs are gaining traction.
Zerodha Fund House advocates investing in digital gold, citing a significant increase in gold ETF flows post-pandemic.
The analysis reveals an increase in assets under management (AUM) of gold ETFs, indicating growing investor interest in this avenue.
Motilal Oswal recommends investing in sovereign gold bonds (SGBs) to benefit from the rising gold price, with the added benefit of an interest rate of 2.5%.
Gold demands this Akshaya Tritiya
According to Piyush Gupta, director of PP Jewelers by Pawan Gupta, gold sales could be between 10-15% this year.
“In India, gold is not just an investment but a testimony to our cultural heritage. It has always symbolized prosperity and tradition. Even though gold prices are rising this year at a rapid pace, it’s important to look on the bright side. It is also important to understand that rising prices reflect not only market conditions but also the true value of gold as a tangible asset with lasting value,” he said.
Vikas Singh, Managing Director and CEO, MMTC-PAMP, recommends investors to check the purity before buying gold.
“The higher the purity, the greater the intrinsic value and value of potential returns. While karats indicate gold content generally, measuring fineness provides a more granular analysis. Importantly, for the investor cautioned, purities can vary even within the 24-karat category,” he said.
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