The Glittering Prize: Why Gold is the Ultimate Investment for Retail Investors

Discover why retail investors are turning to gold as the ultimate investment choice this year. Don't miss out on the golden opportunity. Read this article to know more.

Bling bling gold is back
  • Gold outperforms stocks in 2023
  • Investors turn to gold amid market volatility
  • Gold ETFs see a surge in folio numbers
  • Multiple alternatives to physical gold investment available


Gold has emerged as a shining star for retail investors seeking substantial gains amidst lacklustre returns from traditional equity investments. Investors are exploring new avenues beyond jewellery and physical assets, embracing options like gold ETFs, digital gold and gold bonds. With its resilience in the face of financial uncertainty and volatile markets, gold has proven its worth time and again. As global equity markets stumble and political tensions rise, gold not only preserves its value but skyrockets. This article delves into the captivating reasons why gold has become the go-to investment for retail investors this year.


Recent returns: Gold vs. Stocks

Gold prices rose by almost 17% in the financial year (ending March 2023), while equities returned only 1%. Gold is now trading at around Rs 61,000 per 10g, up from Rs 52,000-53,000 a year ago.

Read article: Gold ETFs vs Physical gold: Which one is better?


Factors Contributing to Heightened Gold Interest

  • Investors are turning to gold due to unpredictable returns from equity investments.
  • Fund managers advise allocating some funds to gold as a hedge against market volatility.
  • Physical gold is seeing greater buying in anticipation of increased prices due to fears of a recession and geopolitical uncertainty in the West.
  • Sovereign gold bonds are a popular investment option due to their 2.5% annual interest yield.
  • Investors are moving money into gold-related investment instruments, such as gold ETFs, sovereign gold bonds, and digital gold.
  • Gold ETFs have seen a surge in folio numbers, but inflows have dropped due to profit booking.
  • Sovereign gold bonds are a popular investment option due to their 2.5% annual interest rate.
  • Digital gold is also gaining popularity, with SafeGold seeing a doubling of transactions and a 100% increase in customer base.


What are the different ways (apart from physical gold purchase) to invest in gold?

Given below are alternative ways to invest in Gold:

  • Digital Gold: Gold is bought and sold online, eliminating the need for physical storage.
  • Gold ETFs: Gold ETFs reflect the current gold prices and can be bought and sold through a Demat account.
  • Sovereign Gold Bonds: Government-issued bonds denominated in grams of gold. Investors can sell the bonds anytime on stock exchanges.
  • Gold Mutual Funds: Mutual funds that invest in gold ETFs. Do not require a Demat account.
  • Gold Derivatives: Futures and options contracts available on Multi Commodity Exchange (MCX).

Read article: Gold price in India: Is buying gold as an investment a wise thought? Expert views

Investing in gold can be a viable option for investors seeking to diversify their portfolio and hedge against market volatility. With its recent impressive returns and various investment options, including digital gold, gold ETFs, sovereign gold bonds, gold mutual funds, and gold derivatives, investors have a range of choices to suit their investment goals.




Disclaimer: This article is intended for general information purposes only and should not be construed as investment or tax advice.




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