Investing in Gold

Investing in Gold

Options for investment in gold:


  1. Physical Gold
    1. Jewelry
    2. Coins
    3. Gold Savings Schemes
  2. Paper Gold
    1. Sovereign Gold Bonds [SGBs]
    2. Gold Exchange Traded Funds [ETFs]
    3. Digital Gold [Mobile wallet platforms like Paytm, GoldRush, etc.]


Gold Market Cycle:

The gold market cycle means the period in which the instrument is in the bull run. Simply, it’s the period from the start point of the bull run to the correction start point. Usually, the gold market cycle lasts for around 8 to 10 years. 

For example – the previous gold market bull cycle was started in 2001 and ended in 2011. In 2001 – [In 2001 approx. per gram price was approx. Rs. 400 & in 2012 it was approx. Rs. 3,112. After this high, it corrected up to Rs. 2,227 in the next 3 years i.e. July 2015]. 

According to Experts, currently gold is in a bull market cycle. So, if one checks the below graph, approx. from 2017, the gold entered in the bull run cycle with approx. per gram price of Rs. 2,523 and as on date gold is at around Rs. 5,230. If the usual bull cycle horizon matches with the current gold market cycle, even if in the short term, gold is in an overbought zone, one can see a good amount of growth in the remaining life cycle. 

According to US-based analyst Nigam Arora, the author of The Arora Expert, “ there is more than 50% probability of gold approaching $3000 in this gold market cycle.” Earlier, Christopher Wood had said in his Greed and Fear report that gold could climb up to $4000 in the current bull cycle. [Current Price as at 6th August 2020 is approx. US$2,060.70, Mumbai – Rs. 5,768 per gram].

Returns comparison with other investment options:

If one compares the returns on major investment options for retail investors i.e. Fixed Deposit, SENSEX, NIFTY, Gold at last 20 years CAGR, Gold has provided the highest rate of return at approx.. 13% of CAGR.[Refer]

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