Gold price by Investorocean.com
Historical Gold Prices
Historical gold prices and trends gives important insight for investment decisions. For the past 10 years the price of gold, in general, has been trending at a higher rate both in the International as well the Indian market. In the US market, the highest during the period was trading as $2000 back in 2011, meanwhile, in the Indian market there had been a steady growth since the same year, with an exception for 2 years in 2014 & 2015. Currently the US gold rate is trending around $ 576.20 and in India, it is at the Rs. 49,420 range.
There are many factors, which affect the price of the gold, and if you are planning to invest in gold, the factors such as US dollar strength, other global events, central reserves etc. should be considered so as to have decent returns.
Keeping an eye on the current prices as well as the knowledge of the past rates of gold would go a long way in planning investments on the yellow metal. While previous performance is not always predictive of future results, the price history of gold might perhaps give hints as to where it may be going. Looking at historical price data, for example, may aid in detecting uptrends or downtrends. Investors may also notice tradable trends in the price data, which might lead to great buying or selling opportunities.
Gold in Futures Markets vs. Spot Market
Indian market has always had encouraging response for gold investments; no matter what the prices are, gold has always been one of the most sought after commodity and stock option. Investing in the futures or spot markets are two options available to an investor or trader.
Gold in Futures
Gold futures can be simply put as an investment option where you will have the opportunity to acquire a future contract of the asset at a price predicted at the time of its delivery. It is a standardised contract created by the futures market to offer a defined amount of subject matter at a future time and location. It refers to a trading objective to predict the price of gold in the international market on a specific date in the future. The profit and loss of investors who buy and sell gold futures is calculated using the gold price differential between the two times of entering and exiting the market.
Gold in Spot
Gold in spot market or Gold ETFs are virtual gold or digital gold. This investment option does not provide physical gold in delivery and always trades in digital transactions. An investor can invest on gold at the given market rate and may earn interest or loose depending upon market fluctuations. Spot market for gold is similar to the stock market and needs to be monitored likewise.
Gold ETF vs Sovereign Gold Bonds
Lately, two gold investment in paper form with actual gold as the underlying asset have emerged as a popular option that are Gold ETFs and the Sovereign Gold Bond (SGB).
Gold as Exchange Traded Funds (ETFs) Passive investment instruments that invest in physical gold and thus are predicated on price of gold. Gold ETFs are listed on the Indian Exchange as other stocks or equities and track gold prices and can be purchased through your trading or mutual fund account. ETFs are a fantastic alternative if you want to invest for the short term or in monthly instalments like a SIP.
Indian Government also issues bonds through the Reserve Bank of India called Sovereign gold bonds, or SBGs. These gold bonds are sold as as unit in which each unit is valued at one gram of gold with purity of 99.9 percent. Since SGBs are government-issued securities that are a sought after and a safer investment in gold. Their worth is measured in multiples of gold grams. SGBs have seen a large growth in investors, as they are seen as a viable alternative to actual gold. However, SGBs has a lesser liquidity than other gold investment in the market. If SGBs are left to mature i.e., for a period of 8 years and then retained, the gains are not subjected to tax. However, if the returns after maturity is sold off then it is treated as capital gains and is hence taxable.
Buying Gold Bars
Gold bars or gold biscuits are rectangular pieces of gold that are particularly popular as an investment option. When planning to invest in gold, a gold bar is a much practical option simply because of its cost effectiveness. The difference in price for a jewellery and a gold bar is substantial and could be nearly 2% of the total cost. While buying gold bars there are few things that should be kept in mind such as the purity and reliability of the seller or manufacturer.
Gold bars usually have the mark of purity, which is usually 999.9 and comes in different weights. Investing in a gold bar makes sense because bars have a smaller premium associated to them. Making charges are normally included in the premium, although shipping and refining fees are occasionally included as well. Larger bars are less expensive to buy, while smaller bars are simpler to sell on short notice. Always make sure that when you buy a gold bar, the bar is hallmarked i.e., certified for its purity, so that your investment is insured.
Gold ETF vs Sovereign Gold Bonds
Gold investments are fruitful, and these days there are several forms of gold investments available for you. Each gold investments has its own advantages and drawbacks, and each is suitable for a certain investment plan. You can purchase Gold ETFs, Gold Coins and Gold Jewellery as an investment.
Gold ETFs are digital gold and is generally traded in the Exchanges like stock, they can be acquired easily with Demat Account or through mutual funds, while gold coins and gold jewellery can be bought through any manufacturer or jewellers, these days they are also available on online platforms as well.
Gold ETFs are generally evaluated as one gram of gold of highest purity i.e., 99.9% gold, but a intrinsically designed gold jewellery can only be 22 carat (92% gold) or lesser because a 24 carat gold is difficult to mould and is fragile. Gold coins can be available in a variety of sizes and weight and can be 99.9% hallmarked.
Gold coins are usually cheaper than Gold ETFs or Gold Jewellery because gold coins price do not include making charges or brokerages, which is included in Gold ETFs or Gold jewelleries, respectively.
Gold ETFs, coins and jewellery, which are held for a period of less than 3 years, are subject to tax as per the income tax slab rates. For investment held for a longer period the gains from such investment is taxable at 20% for gold coins and jewellery, and for ETFs the gains are taxable at 20.8%.
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