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As India approaches Dhanteras, when buying gold is considered auspicious, investors must be evaluating how to invest in the metal this year.
While jewellery and coins remain popular among households, investors also have the option of financial instruments such as Gold Exchange-Traded Funds (ETFs) and Sovereign Gold Bonds (SGBs).
“Gold continues to hold a special place in every Indian portfolio. This Diwali, the question is not whether to buy gold, but how to own it,” said Ajay Kumar Yadav, Group CEO and CIO at Wise FinServ. “Physical gold is perfect for gifting, but not the best investment. Making charges, purity concerns, and storage costs all eat into real returns.”
Gold ETFs, which trade on stock exchanges, offer investors a way to mirror gold prices without holding the physical metal.
According to Yadav, they provide liquidity, tax efficiency, and transparency. Gains on gold ETFs sold within a year are taxed according to the investor’s income slab, while holdings beyond a year attract a 12.5% long-term capital gains tax.
For investors with a longer horizon, Sovereign Gold Bonds can be an alternative. If held until maturity, capital gains on SGBs are completely tax-free, Yadav added. “SGBs reward patience and deliver the best post-tax returns over the long term.”
Currently, SGBs can only be bought via the secondary market, as the government has announced no new tranche this year.
Minister of State for Finance, Pankaj Chaudhary, noted that global geopolitical tensions have pushed gold prices sharply higher, increasing the government’s borrowing costs through SGBs. He said new tranches of the scheme will be considered only after reviewing cost implications, as part of broader debt management efforts that include government securities and treasury bills.
According to Abhishek Bhilwaria, CEO and Co-founder of Bhilwaria MF, festive buying combines emotion with strategy. “While physical gold connects with tradition, ETFs and SGBs are cost-effective ways to participate in gold’s rally,” he said. “The choice depends on one’s goals — whether it’s liquidity, sentiment, or long-term wealth creation.”
Also Read: Stock market holidays: NSE and BSE closed on Dhanteras, Diwali — Check Muhurat trading time
While jewellery and coins remain popular among households, investors also have the option of financial instruments such as Gold Exchange-Traded Funds (ETFs) and Sovereign Gold Bonds (SGBs).
Gold prices in India have risen approximately 60–61% over the past year, reflecting global economic uncertainty and central bank purchases, according to
market analysts.
Financial planners note that different forms of gold offer varied benefits.
“Gold continues to hold a special place in every Indian portfolio. This Diwali, the question is not whether to buy gold, but how to own it,” said Ajay Kumar Yadav, Group CEO and CIO at Wise FinServ. “Physical gold is perfect for gifting, but not the best investment. Making charges, purity concerns, and storage costs all eat into real returns.”
Gold ETFs, which trade on stock exchanges, offer investors a way to mirror gold prices without holding the physical metal.
According to Yadav, they provide liquidity, tax efficiency, and transparency. Gains on gold ETFs sold within a year are taxed according to the investor’s income slab, while holdings beyond a year attract a 12.5% long-term capital gains tax.
For investors with a longer horizon, Sovereign Gold Bonds can be an alternative. If held until maturity, capital gains on SGBs are completely tax-free, Yadav added. “SGBs reward patience and deliver the best post-tax returns over the long term.”
Currently, SGBs can only be bought via the secondary market, as the government has announced no new tranche this year.
Minister of State for Finance, Pankaj Chaudhary, noted that global geopolitical tensions have pushed gold prices sharply higher, increasing the government’s borrowing costs through SGBs. He said new tranches of the scheme will be considered only after reviewing cost implications, as part of broader debt management efforts that include government securities and treasury bills.
According to Abhishek Bhilwaria, CEO and Co-founder of Bhilwaria MF, festive buying combines emotion with strategy. “While physical gold connects with tradition, ETFs and SGBs are cost-effective ways to participate in gold’s rally,” he said. “The choice depends on one’s goals — whether it’s liquidity, sentiment, or long-term wealth creation.”
Also Read: Stock market holidays: NSE and BSE closed on Dhanteras, Diwali — Check Muhurat trading time
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