Akshaya Tritiya 2024: Gold jewellery or digital gold ?

Akshaya Tritiya 2024: Gold jewellery or digital gold ?

Today marks the observance of Akshaya Tritiya 2024, a significant festival embraced by Hindu and Jain communities nationwide. This occasion holds cultural weight in the purchase of valuable assets, notably gold. Traditionally, each passing year witnesses a subtle shift in the customary practice of procuring physical gold on Akshaya Tritiya, owing to the emergence of novel avenues for gold investment.

With an array of investment opportunities extending beyond conventional gold jewelry and coins, individuals are increasingly inclined towards exploring alternatives like sovereign gold bonds (SGBs), gold exchange-traded funds (ETFs), and gold mutual funds. Ganesh Balakrishnan, Co-Founder of Aurm, an entity specializing in asset protection, offers insights into the factors guiding individuals in their choice between physical gold acquisitions and digital gold investments.

Factors Influencing Digital vs. Physical Gold Purchases:

Balakrishnan emphasizes the importance of considering several factors in the decision-making process, such as the intended purpose—whether for investment, utility, or gifting. While purchasing digital gold primarily serves as an investment endeavor, acquiring physical gold jewelry transcends mere investment purposes.

Traditional gold jewelry carries utility as adornments for special occasions and holds sentimental value as cherished gifts, particularly when exchanged during Akshaya Tritiya festivities. Balakrishnan also highlights the significance of family customs and traditions, wherein the collective experience of shopping for jewelry strengthens familial bonds and fosters cherished memories.

Impact of Economic Climate and Market Trends on Gold Acquisitions:

In light of the prevailing economic climate and market dynamics, Balakrishnan notes the uncertainty prevalent in global economies, characterized by the onset of economic downturns in developed nations and geopolitical tensions impacting public markets. Against this backdrop, gold emerges as a secure investment option, reflected in its record-high prices of late.

Digital gold offers enhanced liquidity compared to its physical counterpart, making it a viable option for individuals requiring immediate access to funds. Conversely, for those with long-term investment goals, physical gold remains a favored choice. Balakrishnan underscores the importance of aligning purchasing decisions with individual financial circumstances.

Pros and Cons of Digital Gold:

From a long-term investment perspective, Balakrishnan delineates the potential advantages and drawbacks associated with opting for digital gold over traditional gold jewelry. While both options offer similar gold value appreciation, digital gold boasts superior liquidity, catering to immediate financial needs.

However, physical gold presents unique benefits, including its usability in everyday life and its potential as an inheritance asset. Balakrishnan also discusses secure storage options for both physical and digital gold assets, citing bank lockers and home safes as viable solutions, albeit with a notable shortage of bank locker facilities relative to the number of individuals possessing gold assets.

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