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A total of Rs 25,702 crore has been raised through the SGB Scheme till end-March 2021 since its inception

Akshay Tritiya, the summer festival of India, associated with wealth and prosperity is just around the corner. This year the festival falls on May 14, 2021.

The festival is traditionally celebrated by purchasing gold in India as it is considered auspicious to do so for a prosperous future.

While every year, this occasion leads to people rushing to jewellery shops to buy gold, but with most states under strict curbs or lockdowns, most jewellery shops are closed or are facing negligible footfalls.

In fact, in the past, sales on Akshaya Tritiya have ranged from 20 tonnes to 25 tonnes, representing about 4% of the country’s total annual consumption as per brokerage house ICRA, however, it has been a different story amid the pandemic.

Instead of buying physical gold, you can look at buying digital gold like gold ETFs, Sovereign Gold Bonds (SGBs) or you can also explore buying jewellery online.

1. Gold ETFs

Gold exchange-traded fund is a commodity-based mutual fund that invests in assets like gold. These exchange-traded funds are like individual stocks and are traded similarly on the stock exchange.

Investing in Gold ETFs is as good as investing in physical gold. An investor may buy as low as one unit and the expenses associated is much lower when compared to physical gold investments. Gold ETFs are highly liquid compared to physical gold. However, one needs a demat account to trade in Gold ETFs.

Each unit of these traded funds represents 1 gram of 99.5% pure gold, which makes them ideal long-term investments, especially if an individual opts to invest larger sums or performs trade systematically.

2. Sovereign Gold Bonds

SGBs are government securities issued in multiples of one gram of gold. These bonds are issued by the RBI on behalf of the government and are traded on a stock exchange. For long-term investment, Sovereign Gold Bond is seen as a better option than Gold ETF.

SGBs have a maturity period of eight-year. If an investor holds these bonds till maturity then will get exemption from capital gains tax. However, in the case of Gold ETF, whenever you sell them, the gains are subject to capital gains tax.

The biggest advantage of investing in SGB is that it provides an annual interest of 2.5% on your investment value, which is not the case in case of Gold ETFs.

3. Online purchase from jewellers

Jewellers are also focusing on online route to cater to Akshaya Tritiya demand for gold. Jewellers like Tanishq, Caratlane, Kalyan Jewellers and many more, now have several convenient options for customers to be able to purchase gold online.

Sanjay Banerjee, COO, Senco Gold & Diamonds said that this time unlike last year the activity is picking up as it is not a nationwide lockdown and he hopes for better demand this Akshay Tritiya.

To cater to customers’ demands, the company has launched ‘flexi gold offer’. The scheme allows customers to book gold for Akshay Tritiya in advance and any fluctuations in the rates of gold on that day will be covered by the company.

For this, the company has video calling options in cities where showrooms are open partially. In states with complete lockdowns, customers can book gold looking at digital catalogues and select their jewellery online on Akshay Tritiya or before.

Should you buy gold this Akshaya Tritiya?

Gold is not only considered auspicious but is also seen as a hedge investment against inflation and security or a safe haven in times of crisis. Since gold is negatively correlated to equities, experts suggest investors to consider investing in it as it often helps in hedging against stock market crashes. According to financial experts, it is ideal to have around 5-15% allocation towards gold in an investment portfolio.

Anuj Gupta, VP, Commodity and Currency Research at IIFL Securities has said, “Gold prices are increasing due to uncertainty in the economy. Weakness in dollar along with slower recovery in US economy is increasing the demand of gold as an investment tool, one should invest in gold as we are expecting prices to rise further.”