Akshaya Tritiya is considered an auspicious day symbolizing prosperity, good luck, and success. It is believed that investments and new ventures made on this day lead to favorable outcomes, making it a popular time for buying gold or starting businesses.
The year 2023 was a strong period for precious metals, particularly gold, which gained around 15% in domestic markets. Various factors, such as geopolitical tensions, central bank policies, changes in the dollar index, and shifts in US yields, contributed to the increase.
MCX gold rose by 12.50%, slightly more than spot Comex gold, which grew by 12.20%. The market has seen continued volatility due to unexpected events, such as the pandemic, Russia-Ukraine conflict, Israel-Hamas tensions, and debt crises, leading to an ongoing sense of risk. Central banks worldwide also increased their gold purchases significantly, with 1,037 tonnes bought in 2023, close to the record 1,082 tonnes in 2022.
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Gold’s potential for long-term appreciation and its role as a hedge against inflation make it an attractive investment option, especially during auspicious occasions like Akshaya Tritiya. However, experts suggest being cautious due to gold’s high domestic prices and potential for a technical correction in the immediate term. In the long run, various factors such as firm overseas prices, geopolitical tensions, and central bank purchases could support gold’s bullish outlook.
To maximize returns and minimize risks when investing in gold, consider purchasing in smaller denominations to make gold more affordable despite high prices around ₹71,000 per 10 grams. The future of gold remains dynamic, shaped by various global factors such as central bank policies, geopolitical scenario, and economic indicators. While the gains seen in the current year are commendable, the historical trend of higher returns during turbulent periods highlights gold’s potential to flourish amidst heightened uncertainty.
Read here: Why Akshaya Tritiya is the perfect time to invest in gold — explained
Experts suggest diversifying investments across various asset classes balances risk and returns, while strategic timing of gold purchases based on market trends can offer better opportunities for maximizing returns.
So should you buy gold this Akshay Tritiya? Let’s see what experts have to say:
Deveya Gaglani, Senior Research Analyst – Commodities, Axis Securities
Gold has been an attractive investment asset for investors across the globe, including India, due to its outstanding return of more than 50% compound annual growth rate (CAGR) in the domestic market over the last two and a half years. It recently reached historic levels of ₹70,000 in India, mainly due to geopolitical tensions and Central Banks’ accumulation of Gold reserves, which have outweighed the Hawkish stance adopted by Fed officials this year.
As the data print from the USA has started coming weaker than expected, we anticipate the positive trend to continue. Furthermore, the Fed will eventually cut rates to support its economy, reigniting the buying of Gold. We expect Gold prices to touch ₹77,000 by the next Akshaya Tritiya (2025), as investors may flock towards Gold due to uncertainty in the global market. It is advisable to invest in Gold ETF, Gold sovereign bond, and Gold Bees instead of physical Gold to avoid storage, theft, or purity risk
Read here: Titan anticipates stronger gold jewellery demand in H2FY25
Hareesh V, Head of Commodities, Geojit Financial Services
Since domestic gold prices are hovering near record highs, there is a chance of a technical correction in the immediate run. But in the long run, firm overseas prices, increased physical demand, and a weak rupee would assist prices to retain their bullish outlook. Hence, cautious buying in minimal quantities is recommended at this Akshaya Tritiya.
Meanwhile, in the international market, a weak US dollar, hopes of interest rate cuts, escalating geopolitical tensions, worries over the global economic outlook, and high central bank purchases would be the positive triggers.
However, firm global equities and any changes in the Fed’s policy decisions would cause a downturn in prices later. Gold is one of the best long-term assets which offers both safety and decent return to its investors. Domestic gold has more than doubled in the last 5 years, and it gained 10 times since 2003. So, investors can make use of every price correction to add the metal into his/her portfolio for long-term benefits.”
Read here: Akshaya Tritiya 2024: Why people buy gold on the auspicious day
Jateen Trivedi, VP Research Analyst – Commodity and Currency, LKP Securities
During the Akha Teej festive season, gold prices often experience fluctuations due to increased demand in the physical market, driven by auspicious events. While gold is considered auspicious for buying during Akha Teej, current prices of around 71000 may be slightly expensive. Therefore, it is advisable to accumulate gold in smaller denominations rather than making large purchases. Additionally, investors should consider factors such as market trends which are a bit volatile, geopolitical events in the Middle East crisis & Interest rate cut delay, and their own financial goals before investing in gold during Akha Teej. Timing purchases strategically and diversifying investments can help mitigate risks and maximize returns in the long term.
Umesh Mohanan, ED & CEO, Indel Money
The elevated gold prices in the domestic market may marginally impact gold demand during the festive season. There may be a decline in the volume but in value terms, the business may not see a significant downfall. In India, gold jewellery is primarily an investment and every year people try to buy a bit of it, however small it may be, as they value it much more than any other investment. Moreover, there are other reasons to buy the yellow metal. The cultural and aesthetic values of the precious metal persuade Indian households to buy gold irrespective of whether the economy is doing good or bad. Gold loans are fast emerging as a viable loan option, which further enhances the liquidity of the yellow metal.
Read here: Silver up 11% YTD, likely to outshine gold in near-term; How should you invest?
Geopolitical tensions and a slowdown in major global economies are forcing the central banks to buy gold, which accounted for 23% of the overall gold purchase at 1,238 tonnes in the January-March quarter. The US dollar’s weakness against other major currencies is also lifting up gold prices. When the US dollar depreciates, the yellow metal price will go up. Gold prices increased 10% to $2,070 an ounce in the March quarter and it appreciated 8% in 2023. Those who wish to invest have to wait for a while as the high prices may not last for long. The easing of tension between the US and China, the smooth culmination of the US presidential election and a de-escalation in the Israel-Hamas- Iran conflicts will lead to a moderation in prices.
While gold’s cultural significance in India makes it a popular investment choice, especially during Akshaya Tritiya, it’s essential to balance emotional and financial considerations when making investment decisions.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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