The budget 2019 shook the fundamentals of investors across the globe. Be it an Indian investor or an NRI investing in India, the budget came out to be more of a shock than a surprise. Gold was no exception under the shock wave. The budget 2019 declared a higher customs duty on the metal from 10% to 12.5% which sky-rocketed its price. The gold rate touched a six-year high of Rs. 34,500 per 10 gram in major cities like Delhi, Chennai, Mumbai, Kolkata, etc.
Geopolitical stress and increased customs duty resulted in the increased price of gold. The US and Iran tension and downfall on the interest rates in US federal reserve also aided the hike in gold prices. Another factor which also supported the price hike was although the small but steady purchase of gold by Asian and some European countries through central banks increasing its demand.
The gold rate, however, saw a minimal correction later on but not making much of an effect leaving the investors confused as to which way to go. The markets are already going through a correction and now gold is even more expensive, the tension brow may rise.
When is the right time to buy gold then?
Like all markets, the gold market also gets affected by the global crisis and wars and other local factors like a budget. A hike in the price now or a downfall, later on, is not a permanent situation. the corrections are not so frequent and large as the stock market but precede a reciprocal. The fluctuations will keep happening as is the market’s nature.
If you go by the previous year’s trend, gold prices were supposed to fall in the second half of July and first half of August but the situation is otherwise. Hence, there is no perfect time to buy gold. If you are planning to buy gold for an occasion yet to come in future, go for buying gold bonds. As and when it will the time to get it converted to physical form, you would have made a lot of profit through the market corrections over the years.
Another benefit of buying gold bonds is that you do not have to worry about storing and safeguarding it. Your gold is safe with the company and will be delivered at your doorstep when you order.
Do not wait for another correction to happen as it may move the pointer in either of the directions given the geopolitical stress, trade wars, and slowdown of economies.
How to go about accumulating gold?
The best and most rewarding way of accumulating gold is by doing it on a regular basis in small quantities just like SIP in mutual funds. while you have invested in gold bonds, buy some more every time there is a dip in the price and when you foresee a need, sell them during high times. This will not only help you earn more when the prices are high but also average out the overall fluctuation impact.