Catch the golden wave: 6 smart ways to ride gold’s market swings | EXPLAINED – Personal Finance
Gold, as a commodity, has recently witnessed sharp swings, drawing renewed attention from investors and market watchers. Last month, prices of the yellow metal surged to record highs in both global and domestic markets. However, the rally proved short-lived. Prices retraced their gains soon after, triggering a phase of profit-booking and renewed volatility.
With gold now trading below its recent peak, analysts across global markets suggest the correction may offer a fresh entry point for long-term investors seeking exposure to the precious metal.
In India, where gold is not merely an asset class but a cultural cornerstone, the question is not whether to own gold, but how to own it wisely.
Investment Options for Gold
As volatility draws fresh attention to gold, Indian investors have multiple structured avenues beyond traditional jewellery purchases.
1. Physical Gold: Coins, Bars and Jewellery
Despite financial innovation, physical gold remains the most common form of ownership in India.
- Jewellery continues to dominate demand but carries making charges and resale deductions, making it inefficient purely as an investment.
- Coins and bars offer higher purity exposure but involve storage and insurance considerations.
- Physical gold appeals to investors prioritising tangible ownership, especially during periods of uncertainty.
2. Gold Exchange-Traded Funds (ETFs)
Gold ETFs, regulated by the Securities and Exchange Board of India (SEBI), allow investors to buy gold electronically through stock exchanges.
Why they’re gaining traction during volatility:
- Ease of buying and selling during price corrections
- Transparent market-linked pricing
- No storage concerns
However, investors must factor in annual expense ratios and the requirement of a demat account.
3. Sovereign Gold Bonds (SGBs)
During price corrections, fresh SGB issuances are often seen as attractive entry opportunities.
For investors without demat accounts, gold mutual funds invest in gold ETFs and allow systematic investment plans (SIPs), enabling staggered exposure during volatile phases. Higher expense ratios compared to ETFs remain a consideration.
Mining stocks often amplify gold price movements, rising faster in rallies but correcting more sharply during downturns.
6. Gold Futures and Derivatives
Gold futures trade on the Multi-Commodity Exchange of India (MCX), offering leveraged exposure.
These instruments are typically used by traders and hedgers rather than long-term retail investors, particularly during periods of heightened volatility.
Gold’s recent surge to unprecedented levels, followed by a swift correction, underscores the metal’s sensitivity to global macroeconomic forces. Yet for Indian investors, its appeal remains enduring. The correction may have opened a window for disciplined entry, particularly through structured financial instruments rather than purely physical holdings.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions.)
