The festival of lights, Diwali, is celebrated across India with utmost enthusiasm. During this time, Indians purchase valuable items, especially gold, silver or other precious metals.
The beginning of Diwali is marked by Dhanteras, an auspicious day celebrated by purchasing gold coins or jewellery. Diwali is the worship of Goddess Lakshmi, the Goddess of wealth. During this time, people decorate their houses with lights and candles to cast evil away. Another unique aspect is buying gold on Diwali, which is considered a symbol of wealth and abundance.
If you are planning on buying gold this Diwali, you might as well consider the following things before making a purchase:
Changes in geo-political conditions: The price of gold is majorly dependent on geo-political events around the world. If certain changes take place in a country’s policies, it will automatically affect the gold prices of other countries. For instance, recently, China decided to release gold into the market, resulting in a price drop in India. Therefore, before you buy gold, you should be aware of these events.
Buying gold is an investment: Indians attach auspicious value to gold. Gold is an integral part of their daily lives and on several occasions. But it does not end there. Moreover, it offers buyers liquidity and financial stability. It is considered one of the safest investments that can be purchased as jewellery, coins, bars, etc.
Increase in US Federal Reserve and gold cost: Government policies play a great role in determining gold rates all over the world. The leading country that affects this global trend the most is the US. Any change in US Federal gold rates greatly affects the price of gold everywhere. Therefore, it is an important factor to consider before you buy gold on Diwali.
The difference in currency: Global trading of gold happens in US Dollars. Therefore, if you are planning on buying gold this Diwali, you should be aware of the difference between dollars and rupees.
Import duties and international trends: India is one of the largest importers of gold in the world. Therefore, its price fluctuates with changing local policies and regulations.
Purchasing gold in India has emotional and religious quotient attached since is considered to be a divine metal with its ethereal shine and imperishable qualities.
Therefore, there is an auspicious time involved. These timings change every year as per the Hindu calendar, or “Muhurat”. According to Hindu ritualistic practices, the best time to buy gold on Diwali in 2022 is from 6:27 am to 6:03 pm on 23rd October 2022. You can also make a purchase from 6:02 pm on 22nd October to 6:27 am on 23rd October this year.
The festival of Diwali involves the worship of Goddess Lakshmi to celebrate wealth and prosperity. Therefore, you will find many stories and legends connected to gold on Diwali. According to one, King Hima’s 16-year-old son was prophesied to die of a snake's bite only after 4 days of marriage. However, his wife helped him defy the God of Death by blocking the entrance of their chamber with heaps of gold jewellery. This marked the tradition of buying gold on the first day of Diwali, “Dhanteras”, to ensure good fortune.
Goddess Lakshmi, according to Hindu mythology , represents wealth, abundance and good fortune. So naturally, this festival of lights is celebrated in a luxurious style with extravagant gifts, a variety of sweets, and flowers..
Needless to say, gold shops see a great increase in sales, either in the form of coins or jewellery, despite high gold prices on Diwali.
Most Indians indeed buy gold on Diwali for its religious value. However, with the right purchase, it can also be a great investment for you.
However, the traditional way of buying gold in the form of coins and bars may not be an ideal investment plan. Therefore, you can opt for the following options for Diwali gold purchase:
You can make a gold investment online by buying digitally at current market price. It allows you to buy 24 Karat gold, which is stored in your digital account. You can also get your holdings delivered in the form of gold coins. In the digital era, making gold transactions at live market prices online is gaining wide popularity due to its flexibility, affordability as well as liquidity.
Gold Funds are open-ended funds that hold gold-related assets. It lets you invest any amount at your convenience without having to open a Demat account. You can also make SIP with small capital while tracking the actual gold price, making it a desirable investment this Diwali.
Gold Sovereign Bond (GSB)
These are government gold bonds that act as a substitute for the physical form of gold. Moreover, it is issued by the Reserve Bank of India; hence, it is highly secure and safe. Moreover, it gives you all the benefits of holding physical gold, such as using it as collateral, returns as per current rates, etc., without having to keep the actual metal in your possession.
Gold Exchange Traded Funds (Gold ETFs):
If you invest in gold digitally, you can opt for Gold Exchange Traded Funds. In this, your money gets invested in various gold-manufacturing companies or in gold bullion. Moreover, these funds are listed on the BSE and NSE, so you can easily make a transaction through your stock broker. However, unlike sovereign gold bonds, you have to open a Demat account to invest in gold exchange-traded funds.
Generally, the Diwali gold rate is higher than the rest of the year due to its high demand. However, there are many financial institutions and jewellery stores that provide attractive Diwali offers for gold jewellery.
Here is a list of new gold schemes this Diwali offered by different banks:
There are several gold schemes offered by SBI related to gold purchases, investments and loans. You can buy gold coins this Diwali from any authorised SBI branch or invest in Sovereign Gold Bonds and Gold Mutual Fund schemes. SBI also offers systematic investment plans and systematic transfer plans. Moreover, if you are looking for personal loans this Diwali, you can also opt for their personal gold loan plan.
HDFC Bank has its own Gold Exchange, Traded Fund. Therefore, you can invest in gold bullion to make returns depending on its performance. You can also make smart investments in HDFC Gold Fund without having to buy gold in physical form.
Andhra Bank Gold Schemes
With the Andhra Bank Gold Scheme, you can secure a gold loan for personal or business purposes. Good fortunes can not only come from Diwali gold purchases, but you can also secure a good credit between Rs. 10,000 to Rs. 20 Lakhs.
PNB Gold Schemes
Under the PNB Gold Scheme, you can directly buy gold from any branch as it is one of the banks authorised for the Sovereign Gold Bonds scheme. You can make a purchase of a minimum of 2 grams of gold with a 2.75% interest rate.
If you are looking for a Diwali gold offer at Axis Bank, you can invest in their Gold Mohurs. You can buy these 24K gold Mohurs directly from their bank across 1,400 branches. The denominations available are 2 grams, 5 grams, 10 grams, 8 grams, 20 grams, 50 grams, and 100 grams. You can make a purchase of the 5-gram Mohur with an image of Goddess Lakshmi engraved on it.
This article discussed the significance of gold in Indian tradition during Diwali's auspicious time. However, buying gold on Diwali is not just a tradition but a smart and secure investment as well. Therefore, if you are planning to make an investment this Diwali, invest wisely while considering all the offers and schemes before purchasing this blessed yellow metal.
Disclaimer: Offers and schemes mentioned here are subject to the regulations of the concerned financial institution. Please contact the lender for more details.
You can claim an income tax exemption on long-term capital gains by selling gold assets under IT Act 1961, Section 54F to save your taxes.
If your gold purchase is over Rs. 10 Lakhs, then KYC is mandatory as per Financial Action Task Force Task Force.
For unmarried women, the relaxation for tax-free gold is 250 gms, while for a married woman, it is 500gms.
Before you purchase gold, you must consider these 5 factors:
Purity of gold
Cost of gold
Credibility of the jewellers or banks.
Ease of sale.
Some of the safest options to buy gold are:
Gold Exchange-Traded Funds or ETFs.
Monthly gold investment scheme.
Gold Funds & Equity Based Gold Funds
Digital gold purchase