5 Reasons to Buy Gold This Ganesh Chaturthi

The majority of Indians frequently purchase gold bonds online. It is regarded as a symbol of prosperity, a way to store money, and an heirloom that may be passed down from father to son. Let’s imagine that you are considering purchasing gold. An auspicious day is Ganesh Chaturthi. You may already know that buying gold bonds online in India honours Lord Ganesha, also called Ganapati, who is seen as the god of wealth and good luck.

The theme of Ganesh Chaturthi is to look forward.

Ganesh Chaturthi is a holiday that honours optimism for the future. One of the reasons it is so well-liked in India is because of this. The event also acts as a reminder that although it’s crucial to have dreams for the future, action in the present is just as important. Ganesh Chaturthi is frequently referred to as “Shubh Arambh,” which denotes that it is an excellent time to begin a new endeavour. Ganesh Chaturthi is the best time to start anything, like a new business or a new product, or to buy gold bonds online, such as stocks, bonds, or gold.

Gold is still a good way to put your money to work. You must have noticed that you can buy gold bonds online in India.

Why Should You Buy Gold Bonds Online This Ganesh Chaturthi?

Inflation

Both inflation and the cost of living have been rising recently. Large-scale geopolitical shocks, the strengthening of the dollar (which fuels imported inflation), supply-chain hiccups, rising metal and cooking gas prices, and the cost of some food items have all contributed to their increased cost.

One of the main things threatening inflation is pressure from prices in both the industrial and service sectors. In India and many other nations, inflation is anticipated to persist in 2022.

According to a World Gold Council study, gold has performed significantly better when inflation increases, rising by an average of 12% when it exceeds 6%. This demonstrates that gold is an effective technique to ward off inflation.

Additionally, consumers account for a sizable portion of the demand for gold, which has affected gold’s price. According to the WGC study, for every 1% increase in inflation, the short-term value of gold increases by 2.6%.

Interest rates rise

Gold typically suffers when significant central banks raise interest rates to combat inflation. However, many central banks were likely to raise rates more gradually and support growth after raising rates quickly in the first half of 2022. The U.S. real rate needs to be higher than 2.5% to affect the gold rate, but it is currently negative.

Bond yields are low

The yield on the 10-year G-sec has been rising since July of last year. This is brought on by increased public borrowing, an elevated debt-to-GDP ratio, a depreciating rupee, rising inflation, rate hikes, and a generalised state of economic uncertainty. Bonds are now less appealing due to declining total returns (also known as inflation-adjusted returns). Future expectations for them don’t call for any positive outcomes. In this situation, wise investors should consider gold as a long-term portfolio diversifier rather than bonds.

Tensions in world politics

Geopolitical tensions were also increasing in many other parts of the world. Examples include the battles between China and Taiwan, Russia and Ukraine, and China and India over their shared border. The focus would switch to gold during uncertain times that might have an impact on society, government, and the global economy. The RBI and a few other central banks have begun to buy gold because they are aware of the risks.

Stock market turbulence

The domestic financial markets, particularly the currency market, are impacted by the volatility in the global financial markets. Inflation, central bank monetary policy decisions, and global political conditions all have an impact on how the stock market will move in the future. People believe that during uncertain times, gold will be popular and perform well.

Gold had generated roughly +8% in absolute returns as of August 16, 2022. However, the returns might be significantly higher by the end of 2022. The southwest monsoon is returning to normal, and people may want to purchase more gold due to the festive mood.

Consider “investing” in gold the right way this Ganesh Chaturthi by designating 10% to 15% of your overall investment portfolio to gold and holding it for a considerable amount of time (over 5 to 10 years) while taking a moderate-to-high risk. You could purchase actual gold in addition to digital gold (bars, coins, jewellery, etc.). Additionally, you could buy government gold bonds online.

On behalf of the government, the RBI sells sovereign gold bonds with a face value of one gramme of gold, including buying gold bonds online. They can be sold on the stock market and have a term of 8 years (with just an exit option at the end of the fifth year that you must take on the interest payment date). Depending on the amount you invest, you may earn interest at a set rate of 2.50% per year and have the chance that it will go up in value.

Or, you could buy gold bonds online. It is an open-ended fund of funds scheme that invests its capital in a gold ETF that serves as a benchmark and is tied to the price of physical gold.

Conclusion

An Indian holiday that is unique among all others is Ganesh Chaturthi. The celebration of Lord Ganesha is a sign of hope for all of India, particularly for the people of Maharashtra. It enables people to let go of the past and look forward with optimism. Since Ganesh Chaturthi occurs after a year in which the economy struggled, it has special significance. People are buying less, and even though there have been many defaults, there needs to be more money. The GDP is no longer growing as quickly.

Most importantly, the average person is starting to feel the effects of the downturn in the economy. This year, this festival of hope is more important than ever. You can visit Piramal Finance to learn more about these and make a good choice.