Financial planners across Karnataka frequently field questions about gold price today from clients weighing whether to add more of the metal to their portfolios, while retail shoppers searching for gold price in Bangalore are usually more focused on the cost of ornaments for an upcoming occasion. These two audiences, investors and buyers, approach the same daily figures with very different goals in mind. Currently, 22-karat gold trades around ₹14,000 to ₹14,600 per gram in the city, with 24-karat gold priced between roughly ₹15,200 and ₹15,900 per gram, both subject to intraday revisions.
Physical Gold Versus Paper Gold
For decades, physical bullion in the form of jewellery, coins and bars has been the preferred way for most Indian households to invest in gold. Yet for some professionals in the technology and services industries based out of Bengaluru, paper-based instruments such as gold exchange-traded funds and sovereign gold bonds have become increasingly popular due to the ease of storage, minimised risk of theft and purity assurance that such financial products provide, with the latter even promising a guaranteed rate of interest every year from the issuing organisation.
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Introduction to digital gold
With online trading platforms for gold, one can purchase digital gold starting with as little as a few rupees for entry into the market, which may not be possible in the case of buying traditional gold jewellery outright due to prohibitive minimums, thereby enticing young buyers looking to dip their toes into the market. Most digital gold portals offer to store the bullion on behalf of the customer in a vault, with an option to switch to physical possession when desired. However, investors must enquire about storage costs, conversion charges and credibility of the vault company before committing to larger investments.
Taxation implications of gold
Taxes owed on profits from gold transactions depend on whether the metal was held in physical or paper form as well as the time held, with different tax rules applying to long-term and short-term gains and another set applicable to sovereign bonds. Seeking advice from a tax consultant on the implications of gold in one’s financial plan is recommended for those looking at making substantial investments in the metal as an asset class due to the complexity of the tax code governing gold investments.
Continuing appeal of physical gold
While the popularity of paper assets continues to grow, demand for physical gold in the city remains strong due to the need for gold jewellery in weddings and festivals, as well as the traditional mindset of gifting gold during celebrations, resulting in a steady trickle of customers across all seasons and busy days ahead of wedding season at jewellery shops located in districts with heavy concentrations of retailers.
Challenges and considerations on physical possession of gold
For those considering buying physical gold in the form of coins, bars or jewellery, considering the costs and hassle of storage is important, with the most common choice being a locker at one’s bank branch, which may have limited availability in smaller branches. Storing gold at home is an option; however, the coverage of a personal property insurer may not extend to covering losses of precious metals without a special rider.
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Thinking of gold as part of an allocation strategy
Most financial planners advise against allocating too large a share of one’s investment portfolio to gold, with experts suggesting a small exposure for diversification as well as to hedge against inflation. By balancing out a small exposure to gold in the form of sovereign bonds or exchange-traded funds, along with physical gold purchases as gifts and for festivals, one can enjoy the benefits of gold as an asset without overexposure.
Conclusion
Whether as a cultural artefact or asset allocation, gold continues to play a special role in the life of an average Kannadiga. Being abreast of day trading prices and learning more about one’s options, as well as seeking professional guidance when needed, ensures that both buyers and investors get the best value for their money.