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-   -   Gold price at all time high of Rs 82,080/10gm | Is it safe to make fresh investments in gold today? (https://www.team-bhp.com/forum/shifting-gears/290338-gold-price-all-time-high-rs-82-080-10gm-safe-make-fresh-investments-gold-today.html)

In India, 24K gold price traded at Rs 82,080 per 10 grams, while 22K gold was quoted at Rs 75,240 this week—almost double of Rs 48,651, five years ago.





Industry Reaction



With the recent Gold rates soaring all-time high, do you think it is a wise long-term investment today? Or would you choose another channel of investment? If yes, where else would you invest?



Source 1, Source 2, Source 3, Source 4

Eagerly watching responses on this thread. When I bought gold at ~35,000 5-6 years back, it sure felt like a lot. A year or two later, when I bought gold again at 50k, it felt like very expensive. As it did at 55k when I bought some again.

82,000 feels stiff....but is it going to cross into the 6-figures? Gold is a fantastic investment. Appreciates, easily sell-able, easily exchangeable, easily transferable to jewellery, easy to store, available via RBI sovereign bonds. At 82k though?

Pro Tip: Tanishq outlets will verify the caratage of your gold for free, even if you bought it from outside (although it is still a surface level check). This free check via their karatmeters was a brilliant marketing move which greatly increased footfalls to their store.

Read this in a book about various TATA businesses. They struggled for an year or two, especially since the designs were more Western style and the showrooms intimidated common folks and didn't have the personal feel of their neighbourhood goldsmith/ jewellery shop.

Once they launched this campaign, women flocked to the showroom and great many were found weeping outside their stores when it was found that their jewellery had too much copper/zinc or were imitation jewellery with negligible gold.

As long as governments world over pursue populist policies, run deficit budgets and print fiat currency with abandon gold will continue to run up. I actually expected that with the Trump's administration's active promotion of crypto, gold would lose steam temporarily but it has surprisingly run up fairly consistently.

To the OP's question, if you are ok to invest for a 5 year horizon and don't need the funds you should be good. Otherwise you can average it out if and when it drops a bit..till last year, it was widely expected to be flattish this year because it delivered almost two year's gains in a single year last year. Well it hasn't been. So, depends on your tolerance for a drop.

I personally feel Gold will do well in both short term due to market voltality and average in long term adjusted to inflation. After all there is no 'short' in gold and always 'long' lol: Also, I personally calculate the real money value with gold rates rather than WPI/CPI.

For real long term generational wealth, it is always physical gold. With the Government reduction in import duty, I don't think buying physical gold in Gulf is worth the hassle anymore. So feel it is better to buy here.

For virtual gold investment, SGB was the best bet but I don't think SGB will ever come back as primary issue. I prefer to check the secondary market and buy SGB maturing in each year as short term investment for next 5 years.

This has gotten me thinking as well actually. Those in my immediate family who understand investments better than me have generally advised me that approx 5% or little more of financial net worth could be kept in gold. I have barely any gold ETF investments in my financial portfolio (it’s virtually negligible). Wish I had pro rata put at least nominal amounts in SBI Gold ETF or similar over the last 4 - 5 years. This has been on my mind last couple of years but I kept thinking it’s too expensive and now gold has clearly soared in the last two years.

Now when I look back at 5 year track record and more so last year or two, the returns have been quite strong.

I think I might put some periodic amounts / surplus investible proceeds in a Gold ETF / MF perhaps, specially given the market is going to remain volatile over the next 6 months at least if not a hint longer.

I invest in gold via muti-asset funds. These funds have given stellar returns for the past two years and I believe Gold ( and other commodities ) are behind it. One of the benefits of investing via multi-asset funds is that you do not have to bother at what levels and how much you should invest in Gold. It is left to the fund manager to balance the various asset classes plus you avoid capital gains as well.

I feel gold will do well, against rupees at least which means it's a good hedge against inflation.

Dollar is poised to be stronger (it already is) against most currencies. Coupled with slowdown in Indian economy, it's a good hedge against inflation and may give good returns in rupees at least. In addition, due to competitive pressure for populist schemes in India, we are going to see deterioration of state government finances in general, regardless of the ruling political party. We already saw in MH and are seeing in Delhi.

This will mean less money available for development meaning slower growth implying flight of FIIs from India. Else the capital for development can be met through borrowing (=printing money) which will lead to inflation and depreciation of rupeee. In both the cases, gold can be a good hedge.

Notwithstanding my current conviction (for a couple of years maybe), I don't like gold as an investment/hedge against inflation because as such it is not good for the country, it's an unconstructive investment in that sense. I prefer to send money abroad to invest in dollars which is capital at work for more productive things, is liquid and repatriable and has given me decent returns in last few years. But again, my personal opinion. I invested in SGB 4 years back as my better half insisted on having "some" gold in our portfolio which turned out to be a decent investment considering I bought at around Rs46k/10gm IIRC. Historically, gold returns have rarely beaten stocks over a medium or long term, be it Rupee or USD.

This is the INR price chart of Gold per gm (since the year 1973):



It was Rs. 26 per gram or Rs. 260 per 10g in 1973. Rs. 260 to Rs. 82,000 in 52 years works out to be 11.5% CAGR

Nail on the head. Gold is seen as a safe haven and is an expense in my opinion. Elderly folks, namely people of my parents generation never sell gold. It is supposed to be sold only during dire times, still the craze with everything Gold.

Will Gold rise to 1.6L in another 5 years, probably not. I see the 10-11% CAGR continuing in the future.
It will be interesting to see the race between Gold and the Sensex and which doubles faster. Both have breached 80k. I have my money on the sensex breaching 1L and later doubling faster than Gold.

Gold has been a good investment if you live in India but not great if you live in US vs their domestic equities.

The reason is that a big part of the returns that we get on gold in India is due to the depreciation of the rupee against the dollar. This depreciation will continue as long as interest rates are higher in India than in the US.

Gold bonds are the easiest way to hold a lot of dollar denominated assets. Much easier than investing in US equities etc due to the LRS/TCS fiasco.

Personally I have a significant chunk of my net worth in US equities but gold is much easier to recommend to friends and family due to its familiarity and trust.

From VROnline

"gold belongs to a class of investments that do not actually produce anything or create any value. Any rise in its worth is based on the belief that when the time comes to sell, someone else will pay more for it. Unlike equity or bonds or deposits, the money that you invest in gold does not contribute to economic growth. An equivalent amount of money deployed in a business or any other productive economic activity will generate actual wealth and will grow larger in a very fundamental way, while a given quantity of gold will just remain the same."

Source: https://www.valueresearchonline.com/...really-golden/

I have kept investing ONLY in gold coins (22k) and gold bars (24k). The appreciation over the the past 2 years is just extra ordinary. Even when I started this just 10 years ago, gold was at 22,000 per 8 gm for 22 k coin. Now it's at 60k for the same coin- a 3 fold increase in price over 10 years.

We were able to double our money over 5 years and used it for my elder daughter's admission abroad. The top jewellery in Trivandrum takes the coins back at the days rate minus 1% and hands over the cheque, so the entire process is seamless and accounted for.

BUT--- due note, income tax department is not far away. Capital gains tax has to be filed for any gain on gold transaction and this takes a chunk of the speculative profit we made.

But even so, considering how our currency is in free fall, best option is to buy gold and you can immediately turn it into cash when the need arises and in whatever sums you need- sell one coin or 10 coins depending on your need. It's instant money at today's rates without the hassle of land sale / brokers etc.

The only caveat is that the price is now astronomical and to buy a coin itself means you need the better part of 60k!

You should always have some percentage of total investment in gold for hedging, even in case of bull markets.

I totally agree with @GTO, whenever you purchase gold, it will feel costly. Its the case with good real estate too.

I bought gold first time when I had to get married, at 800rs per gram, Dad bought some and in-laws bought some. Didnt consider back then as investment but as a cultural inclusion. Over the years we bought physical gold as again jewelry.

Post 2010, I have gold as investment option, coins, ETF and once the digital gold is launched I have made it a point gold is part of SIP plan. Digital gold on safegold.com is on my DAILY SIP plan. I have stopped investing in ETF due to gap in the rates and also the charges for them isnt justified as compared to Digital Gold.

Even better was, in the last few year I have not only invested in gold on daily, monthly, some times also on occasions, I also LEASE gold on the safegold.com platform, means last three years I kept buying and leased at 3%,7% and now 3% lease of gold on that platform.

Another major gold investment that I have also is in SGB, in all the last few years launched by GOI. Never miss that opportunity of SGB, among all gold invest, SGB and Digital gold are THE BEST in my opinion.

Simple words: Yes will buy gold. My love is daily Gold SIP. :loveit