Just like the rest the world, gold investment in India is commonplace. Technically speaking, India is the second largest gold consumer in the world; with China being the first.
However, unlike most countries in the world, in India most people do not buy gold as an investment but rather as a regular part of their social lives. People buy gold for weddings, dowry as well as festivals and numerous other possibilities.
At the same time, gold has also been used historically as a way to combat inflation. Whenever the world’s economy becomes unstable, the India government begins to hoard the precious metal in their treasury which only further ads to the increased value of the precious metal. As the government begins to start the recording, so too do the citizens.
Gold Investment In India Could Yield Excellent Returns
Many people in India buy gold in small quantities and on a regular basis; regardless of price. To most, it is not an investment but rather a necessity of social status. As a result, it is not uncommon for many households to have large quantities of gold informs such as rings, bracelets and watches.
However, the most part this goal will never return any investment. By simply choosing to hold onto it one will never receive any interest or dividend. Further, since the value of gold increases at a slower rate than the rate of inflation, the longer you hold onto it the more money you will lose when you finally do sell it.
When it comes to gold investment in India, there are many different ways in which to purchase the precious metal. The first and most common method is that of the physical ownership of the gold. This can be in the form of jewelry or other forms of “scrap” gold or even the ownership of Boolean such as coins and bars. Keep in mind that while physical possession does have its many benefits, it is also very risky and hard to store safely.
As a result, the government of India developed its Gold Deposit Scheme which is available through the SBI. In this method, when one has too much Boolean and scrap gold line around, they can simply deposit with the SBI. They will have their choice of three, four or five year investments in which they can earn as much as one percent annually interest. Best of all, the interest is tax-free. However, any gold invested with the SBI is melted down into bars which means you will never be able to get back the original piece.
Then of course there are the very popular Exchange Traded Funds which are commonly referred to as ETF’s. When you invest in one of these funds, your money is pooled with other investors in order to purchase shares in companies that mine, refine and manufacture gold products. Of course there is a significant amount of risk associated with ETF investment, however you can receive as much as a two percent return on investment.
There are also several popular methods of gold investment in India to choose from. Many of these will only yield between one and two percent per annum. However, if you have enough initial investment one of the most profitable ways to invest in gold is to purchase the precious metal in scrap form from the local pawn shops at below current spot market prices.
Keep in mind that there will always be a risk associated with investing in gold. Never invest more than you are willing to lose.Dan Craig