Hello readers, we are happy to announce that our team of MoneyWiseMind.com launched a new section “Investing Insights: Weekly Q&A for Stock Market Newbies”, to spread the basic stock market knowledge to the beginners.
This is your go-to resource for demystifying the stock market from the scratch. Each day, we will present 10 carefully curated questions with answers that will cover essential concepts, strategies, and terminologies. Whether you have just entered into the market, or trying to starting your stock market journey, or looking to strengthen your foundation, our weekly post will guide you through the basics and beyond, making investing accessible and understandable for everyone. Happy reading.
Is gold suitable for short-term investment?
Gold is generally more suitable for long-term holding rather than short-term trading. Short-term gold prices can be unpredictable. Investors use gold mainly for diversification, inflation protection, and stability over time.
What factors influence gold prices in India?
Gold prices in India are influenced by global gold prices, the value of the US dollar, inflation, interest rates, geopolitical tensions, and the rupee–dollar exchange rate. Import duties and taxes also affect domestic prices.
Does gold give guaranteed returns?
No, gold does not provide guaranteed returns. Its price depends on factors such as inflation, interest rates, currency movement, and global economic conditions. Gold is mainly used for wealth preservation, not high growth.
Is it better to invest in gold at once or through regular investments?
How much gold should an investor hold in their portfolio?
Most financial experts suggest allocating 5% to 15% of your total investment portfolio to gold. This helps reduce overall risk and improves stability during market volatility. Gold should act as a support asset, not the main source of returns.
Which is better for investors: physical gold or Gold ETFs?
Physical gold suits investors who want jewellery, gifting value, or emotional satisfaction. Gold ETFs are better for those who want pure investment exposure, easy liquidity, lower costs, and no storage issues. Many investors use both to balance safety and convenience.
Can Gold ETFs hedge against inflation?
How are physical gold and Gold ETFs taxed?
Both physical gold and Gold ETFs are taxed in the same way in India:
If sold within 3 years, gains are taxed as short-term capital gains according to your income tax slab.
If sold after 3 years, gains are taxed at 20% with indexation benefit.
Physical gold also includes GST and making charges at purchase, which ETFs do not have.
Is physical gold safer than Gold ETFs?
Physical gold feels safer because it is tangible and personally owned. However, it carries risks such as theft, storage costs, and purity concerns. Gold ETFs are safer in terms of storage, regulation, and convenience, as they are held in demat form and regulated by SEBI. Safety depends on whether you value physical possession or financial convenience.
Can Gold ETFs be converted into physical gold?
In most cases, retail investors cannot convert Gold ETF units into physical gold. Gold ETFs are designed for price exposure, not delivery. Redemption usually happens in cash at the prevailing gold price. Physical delivery may be available only to large institutional investors holding very high quantities.
