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India has a strong affinity towards investment in gold, which is why it is the second-largest market for this precious metal in the world. While it can be a safe haven for investment, you can generate higher returns by investing in equities of the companies dealing in gold.

You can invest in gold stocks on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) in India. The value of these stocks depends on various factors such as:

  • Company financials

  • Gold prices 

  • Market sentiments

  • Domestic and global macroeconomic factors

What Are the Factors to Remember Before Investing in Gold Stocks?

When investing in gold shares in India, you need to take into account the following factors:

1. Investment Strategy

Depending on your investment goal and the company’s performance, you can opt for a gold stock that best suits your financial needs. Alternatively, you can also invest in gold mutual funds.

2. Volatility

The performance of gold stocks in India depends on various factors, including the company’s financials and prices of gold. When investing in stocks, you need to factor in market fluctuations when determining your returns. 

3. Taxation

Capital gains tax applies to investments in gold stocks in India. You will have to pay a short-term capital gains (STCG) tax of 15% along with applicable cess if you hold the stocks for less than 3 years.

A long-term capital gains (LTCG) tax at a rate of 10% applies when the investment period is longer than 3 years. Moreover, LTCG tax is exempt up to the limit of ₹1 Lakh.

How to Invest in Gold Stocks

To invest in gold shares in India, you need a demat and trading account. You can open a demat account with a trading platform or brokerage firm and invest in these stocks by linking your bank account.

Apart from being a great investment option, gold assets allow you to avail of quick funds with minimal paperwork in case of emergencies. On Bajaj Markets, you can compare different loan offers and apply online for the one that best suits you.


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FAQs on Gold Stocks in India

Which type of gold investment is the best?

If you are thinking of investing in gold, you can diversify your portfolio by investing in different forms of gold. These include gold jewellery and coins, gold ETFs, gold mutual funds, and stocks. You can choose any option that best suits your parameters.

Is investing in gold stocks a good option?

Certain gold stocks can provide you with much higher returns than CAGR on gold prices. However, investing in gold stocks comes with a risk of market fluctuations.

What is the safest option to invest in gold?

You can buy minted gold coins provided by authorised banks or gold ETFs if you are looking for the safest option.

Do I need a demat account to invest in a gold stock?

Yes, you need a demat and trading account if you wish to invest in gold stocks in India.

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