Gold is one of the precious metals in India. Indians consume the yellow metal in tonnes every year, making India one the largest importers of gold in the world. With the gold rate expected to rise in the future, now may be the right time to buy gold.
However, before investing in a gold buying company, it is crucial to be mindful of factors, such as gold purity, weight, market rates, etc.
Reasons to invest in gold jewellery
Before learning to buy gold, let us understand the reasons people buy gold for investment:
- Hedge inflation
It is a common fact that when the gold rate in Trichy and other parts of India increases, the value of currency declines. Over the past few years, the value of most currencies has depreciated relatives to gold. Hence, investors are more interested in investing in gold than currency. The reason is that when inflation rises, gold buying companies or investors put their money to hedge against inflation.
- Tangible asset
Another reason investors put their money in gold is because of its tangibility, and It brings with it a sense of safety. Besides, investing in gold is an easier option than real estate. With the gold rate in Trichy remaining high, it assures the investors that their money is safe. It is worth noting that intangible assets stored online are prone to hacking and misuse. but, gold is immune to such concerns.
- Liquidity
The benefit of gold investment is that it can be liquidated quicker than other physical assets. That is the reason most people buy gold only to resale it when the gold rate increases in the market. The upside of gold investment is that there is no lock-in period. But, the gold rate in Trichy or anywhere else will depend on the purity level of gold, weight, and other factors.
- Geopolitical factors
The best part about investing in gold is that it does well even during a financial and political crisis. For instance, the gold rates hit a high record during the unprecedented COVID-19 pandemic. Also, a political crisis that negatively impacts asset classes has a positive impact on the gold rate. In such times, the demand for gold increases as investors hold their money in gold rather than currency.
Things to know before buying gold jewellery
Several factors influence the gold jewellery price in India. As a gold buying company or an individual investor, you will need to be mindful of all factors affecting the gold price before buying gold.
Here are the top tips to buy gold jewellery:
- Check the purity of the gold
Before buying gold, it is imperative to check the level of purity. The purity level of gold is represented by karats. For instance, 14-karat, 18-karat, and 22-karat gold. You will also find 22k gold which is the purest form of gold. It is not suited to make gold jewellery.
So, before making a purchase, make sure to establish the gold’s purity level. This way, you know how much a gold item is costing you.
- Buy from a reputed dealer
The gold market is not short of gold dealers who indulge in malpractice and illegal activities. They lure gold buyers in by offering better prices but end up giving you gold at a higher price. Therefore, as a gold buying company or individual, you must buy from reputed dealers. One way to ensure your gold dealer is legitimate is by asking for their credentials and documents proving their legitimacy before handing over your hard-earned money.
- Compare different rates
The gold rate in Trichy or anywhere varies across gold dealers. A golden piece of advice would be to visit multiple gold dealers in the market and compare at 3 to 5 gold dealers. This way, you can choose a dealer that offers a fair and honest market price.
- Know the gold’s weight
Another factor that impacts the gold rate is the weight of the gold. The heavier the gold items, the higher would be the price. Gold dealers usually add precious stones to the gold jewellery, which significantly increases the final gold price. Before making a purchase, make sure the precious stones are separated, and you are paying for the gold content, not the stones.
- Buy gold during off-seasons
It is observed that gold dealers offer better rates and discounts during off-seasons, such as weddings, Diwali, etc. If you wish to buy gold at a lower rate, it is advisable to buy gold jewellery during off-seasons. Just make sure to check the level of purity and its weight.
In brief,
Investing in gold is a much better option than other assets, such as real estate. However, the gold rate depends on the above-said factors that you will have to be mindful of before making a purchase.
