Gold buying is considered opportune during Dhanteras - the first day of the Diwali festival. Purchasing and gifting the yellow metal during the festival is common across ages and income groups, often leading to gold demand reaching its annual peak around this time.

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Investors also believe that gold purchase brings financial security to their portfolio.

For investors looking to buy gold this festival season, Renisha Chainani, Head of Research, Augmont said it is an apt time.

“Gold outlook is positive going forward and is expected to touch record high soon, as its mainly dependent on three things -inflation, economic outlook and demand,” Chainani said in an exclusive interaction with CNBC-TV18.

Firstly, she said worldwide inflation has soared to multi-year highs this year and will continue to do so for years to come.

"Inflation in the United Kingdom is at a nine-year high, while inflation in the US and Eurozone is at a thirteen-year high, and energy prices are also at a thirteen-year high. Inflationary signs are becoming more visible by the day, ranging from rising transportation costs, rising energy bills, rising food and general commodity prices, to product and labour shortages,” she said.

Secondly, she added that large national debts incurred during the COVID-19 pandemic must now be repaid, and any government's strategy will include devaluing its currency through inflation.

"The economic situation is dire, and national economies are in bad health, yet the investment community does not appear to be aware of this," she said.

"Thirdly, retail demand for gold jewellery, bars and coins is very robust in emerging countries due to festive seasons and pent-up demand for the next 5-6 months," Chainani said.

However, due to the ongoing concerns regarding the COVID-19 pandemic, visiting jewellery shops can still be challenging especially given the crowds that gather during festivals. Hence, digital gold is finding favour in India.

In the words of Ashraf Rizvi, founder and CEO, Gilded, "Digital gold is a great purchase during Diwali as it not only offers all the benefits of physical gold but also removes the hassles that accompany physical gold purchase. With digital gold, investors no longer need to worry about storage, safety and transportation. Additionally, there are no added insurance costs and making charges attached to digital gold, providing buyers with savings."

Indians can conveniently buy and gift digital gold through a mobile app where the purchased gold is accessible 24x7. As little as a gram of gold can be bought, fitting into everyone’s Diwali gifting, which is a key advantage, Rizvi told CNBC-TV18.

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(Edited by : Jomy Jos Pullokaran)

First Published:Nov 1, 2021 5:13 PM IST