Shiny Things, Smarter Choices

Hello Reader

Let’s talk about gold today — not the shiny necklaces or wedding jewelry, but a modern, smarter way to own gold without the fuss of vaults and safes. Intrigued? Let’s dig in.

Why is Everyone Talking About Gold?

Gold has always been a symbol of wealth, but investing in it has evolved. Today, instead of buying physical gold, more people are opting for Gold ETFs (Exchange Traded Funds).

What’s the deal with Gold ETFs? They’re like owning gold, but better. You buy tiny digital units of gold (stored securely on your behalf) that you can trade on stock exchanges, just like shares. Each unit represents a fraction of a gram of physical gold — pure, safe, and hassle-free.

And guess what? Indians are flocking to Gold ETFs like never before.

The Golden Numbers

Over the past few years:

• The gold held by ETFs has doubled, reaching 55 tonnes by late 2024.
• Investments in Gold ETFs have surged to over ?12,000 crores in less than two years.
• Trading volumes have more than doubled compared to last year.

Why the buzz? For starters, gold has delivered an impressive 13–14% annual return in rupee terms over the last five years. If you had invested ?100 in gold five years ago, it would have grown to around ?185 today.

Why the Sudden Love for Gold ETFs?

1. Tax-Friendly Rules: Recent changes reduced the holding period for long-term capital gains from 36 months to just 12 months. Gains are now taxed at a flat 12.5%, making Gold ETFs more attractive.
2. Limited Alternatives: With fewer new Sovereign Gold Bonds (SGBs) being issued, investors are looking for other options.
3. Global Factors: Uncertain markets and expectations of lower interest rates have boosted gold’s allure worldwide.

But It’s Not All Gold and Glitter

Gold ETFs aren’t perfect. Here’s why:

• Liquidity Issues: Some ETFs don’t trade frequently, so selling large amounts quickly could mean lowering your price or waiting for buyers.
• Tracking Errors: Gold ETFs aim to match gold prices but sometimes fall short, cutting into your returns over time.
• Costs: Annual fees like expense ratios and transaction costs can quietly chip away at your profits.
• No Passive Income: Unlike stocks or bonds, gold doesn’t pay dividends or interest

The Smart Approach

Gold ETFs are a tool, not the whole solution. The key lies in how you use them. Overloading your portfolio with gold could mean missing out on better opportunities like equities or bonds.

Here’s the strategy:

• Take stock of your investments. What percentage is in gold? How does it compare to your allocations in stocks or mutual funds?
• Diversify smartly. Balance is the secret to long-term financial growth.

Because while gold will always glitter, a well-planned portfolio is where the real shine lies.

? Coming up next week!

General Market Overview:

Indian markets showed mixed trends this week, with volatility driven by both domestic and global factors. Sensex and Nifty experienced sharp corrections on Friday.

Market Outlook:

• Experts expect a possible market bounce back in the next few days due to continued DII buying, particularly in private banks and other large-cap stocks.
• Concerns remain over weak corporate earnings for Q3-FY25 and muted demand in key sectors, which may lead to further market corrections.

Other Factors:

• Geopolitical tensions and global economic uncertainties, including China’s slower GDP growth and US inflation concerns, remain critical for investor sentiment.
• RBI’s stance on inflation and upcoming data releases on loan growth and inflation could impact market direction.

IPO News:

Laxmi Dental IPO:

• Opens: January 13
• Closes: January 15

Price Range: Yet to be disclosed.

IPO Listings:

January 13: Standard Glass Lining shares to list.

January 14: Quadrant Future Tek and Capital Infra Trust shares to list.

Key Earnings Releases:

• January 13 (Monday): HCL Technologies.
• January 14 (Tuesday): HDFC Asset Management Co, Network18 Media & Investments, Shoppers Stop.
• January 15 (Wednesday): HDFC Life Insurance Co, CEAT, L&T Technology Services, Reliance Industrial Infrastructure.
• January 16 (Thursday): Infosys, Axis Bank, LTIMindtree, Havells India.
• January 17 (Friday): SBI Life Insurance Co, Wipro, Tech Mahindra, ICICI Lombard General Insurance Co.
• January 18 (Saturday): Kotak Mahindra Bank, RBL Bank.

Important Economic Data to Watch:

India:

• Consumer Inflation Data: December 2024 (January 13).
• Wholesale Price Inflation Data: December 2024 (January 14).
• Export and Import Data: December 2024 (January 15).
• Bank Loan and Deposit Growth: Data for January 3, 2025 (January 17).

2. Global:

• US Producer Price Inflation: December 2024 (January 14).
• US Consumer Price Inflation: December 2024 (January 15).
• US Retail Sales Data: December 2024 (January 16).
• China GDP: Q4 2024 (January 17).
• South Korea Interest Rate Decision: January 16.

?? Prime Wealth Finserv In Media

Chakrivardhan Kuppala., wrote for Money Control

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Hope you liked reading it as much as we did writing it! See you! ??