Gold price today hits Rs 47,000-mark, experts see rate jumping to Rs 50,000; Money-making opportunity opens

Gold price today in the domestic commodity market hit a record high when the MCX gold rate touched Rs 47,030 per 10 gm in the early morning trade. According to the commodity experts, gold price in Indian commodity market is expected to hit Rs 50,000 per 10 gm due to the Coronavirus fears making the yellow metal an investment haven for those who want safety for their money. They said that due to the dipping equity returns, investors are moving towards dollar and gold. Since, dollar has slid around 2.5 per cent in the forex market in last one fortnight, people are pumping money into gold. But, which form of gold will give better returns — physical gold, future gold or electronic gold or Gold ETF? Tax and investment experts are batting for electronic gold to get best returns like Gold ETF. The reason behind this is that it is easier to liquidate and doesn't create any storage problem.

Speaking on MCX gold rates rally, Anuj Gupta, Deputy Vice President — Currency & Commodity market at Angel Broking said, "Gold price MCX has gone up to Rs 47,000 per 10 gm levels because of the lowering dollar price at the Forex Market. The US dollar has crashed to the tune of 2.5 per cent in the last fortnight and hence out of the two options — dollar and gold — investors are pumping their money into gold thereby boosting its price so much that it hit its 8-year high in international markets." 

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Asked about the gold price in India and in the international markets, Anuj Gupta said, "Spot gold price is poised to hit $1,780 per ounce in around one month and if we compare it with the MCX gold rate, we can expect gold price in India to hit Rs 50,000 per 10 gm."

Elaborating upon how to make more money in this gold rally, Manikaran Singhal, a SEBI registered investment expert said, "Gold ETF, Gold Fund or Gold bond is better than physical gold because it's easier to liquidate without any storage problem, which a physical gold holder comes across. However, the gold investment should be for the long-term, say twenty or above years as the returns on it would be in sync with the gold price rally in the spot market." 

Asked about the form of investment in electronic gold,  Manikaran Singhal said that an investor can invest in Gold ETF or Gold Fund even in the SIP (Systematic Investment Plan) mode and it would give almost the same returns as an investor can get in normal Mutual Funds SIP available in the market. Manikaran again maintained that the return he said is for the long-term.

Commenting on the taxes involved in the gold investment, Kartik Jhaveri, Director — Wealth Management at Transcend Consulting said, "All taxes that are involved in the physical gold are being levied on Gold Fund and Gold ETF investment. However, in the case of Gold Bonds, the Long Term Capital Gain (LTCG) is exempted but the Gold Bond is not always available for investing. It is launched by the Government of India when it needs to generate money from the market at cheaper rates." 

Kartik Jhaveri said that Gold Bond is not an investment. In fact, it's a loan that the Government of India takes from the Aam Aadmi. Gold Bond is subject to lock-in and it has a maximum investment limit. Since investment is a regular process, it's not advisable for an investor to wait for the Gold Bond keeping its money choked. So, if an investor has surplus money, he or she can invest that in Gold ETF or any other Gold Fund for the long-term.