Why Akshaya Tritiya is the perfect time to invest in gold; recent returns speak for

Akshaya Tritiya 2024: Gold investment in India has a rich cultural history, and people are emotionally attached to gold buying on various occasions, festivals, and auspicious days. Buying gold on auspicious occasions like Akshaya Tritiya is a traditional practice in India that is believed to bring prosperity and good luck.

Tapan Patel, Fund Manager-Commodities at Tata Asset Management, highlights that gold’s role as a hedge against inflation and economic uncertainty makes it an attractive investment option beyond traditional jewellery consumption. “Akshay Tritiya” is particularly significant and is considered one of the most auspicious days of the year, according to religious belief. The term “Akshaya”, which means “never decreasing, “signifies new beginnings such as starting a new business, marriage, investment, or farming. In India, people often buy gold as an investment, symbolising perpetual prosperity and abundance.

Akshaya Tritiya and gold prices

Historically, gold prices have grown steadily, often showing stability or an increase around Akshaya Tritiya due to heightened demand driven by cultural and religious sentiments.

“This trend offers investors a potential opportunity for profit from price appreciation. Gold is both a safe-haven asset and a hedge against inflation, offering constancy and diversification during economic uncertainty. Investing in gold on Akshaya Tritiya can help accumulate long-term wealth and protect against financial volatility,” said Sarvjeet Singh Virk, Co-founder & MD of Shoonya by Finvasia.

Return on gold investment since last Akshaya Tritiya

Last year, on Akshaya Tritiya (April 22), the price of gold (24 carats) in the national capital was ₹61,300 per 10 grams. Days before Akshaya Tritiya in 2024, the price of gold is hovering near ₹71,700 per 10 grams. The returns from the yellow metal from the last Akshaya Tritiya (April 22, 2023) are around 19 per cent, as per the chart shared below by Kedia Advisory. Investors can consider buying gold to hedge against potential losses on this Akshaya Tritiya on Friday, May 10, 2024.

Gold delivers better returns than key benchmark indices

As per the data shared above, the yellow metal has delivered a one-year return of 19 per cent, while the Nifty 50 has yielded a return of 20 per cent. The Sensex has seen a return of less than 18 per cent, and the Nifty Bank has returned around 10 per cent during the same period.

Akshaya Tritiya 2024: Gold investment outlook

The current market environment and religious beliefs could be favourable for gold investment. Gold prices have risen sharply in recent months, hitting all-time highs in domestic and international markets.

“Gold prices in India have crossed ₹73,000 per 10 gram while at COMEX prices have crossed the $2400 per ounce mark. The key supportive factors of the recent rally were the central banks’ gold buying, rate cut expectations, and geopolitical risk. Gold prices have rallied in anticipation of sooner rate cuts starting from March, shifting to June. The forecast is coming for a mere one rate cut in September, indicating a ‘higher for longer’ rate cycle,” stated Tapan Patel.

Akshaya Tritiya 2024: Different forms of gold investments

According to Tapan Patel, gold investment offers various options such as purchasing jewellery, coins, bars,exchange-traded funds (ETFs), gold funds, sovereign gold bond schemes, and Digi-Gold. Investors may explore different investment themes available in the market.

Sarvjeet Singh Virk emphasised the importance of thorough research before gold investment, despite its auspicious nature. Before making decisions, he suggested considering options like gold coins, ETFs, sovereign bonds, digital gold, and gold mining stocks.

Why Akshaya Tritiya is the perfect time to invest in gold?

“Comparing Gold CAGR returns over the last 15 – 20 years from Akshaya Tritiya to Akshaya Tritiya, gold had delivered a 12 – 13 % returns. There have been instances of some price correction, but overall rise in prices have been consistent and steady. There are several platforms for market participants to invest in gold amid new investment vehicles being launched in India in past 5 – 8 years. We believe that while prices may fluctuate, the essence of Akshaya Tritiya remains unchanged a day synonymous with good fortune and new beginnings. We see this as an opportunity to celebrate the true value of gold beyond its market fluctuations,” said Naveen Mathur, Director – Commodities & Currencies, Anand Rathi Shares and Stock Brokers

This year, Akshaya Tritiya, also known as Akti or Akha Teej, falls on May 10. The Akshaya Tritiya puja muhurat will start from 4:17 am on May 10 and end at 2:50 am on May 11.

Disclaimer: The views and recommendations made above are those of individual analysts, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.