Dhanteras Gold Buying: What Type Of Yellow Metals, NRIs Are Allowed To Buy This Diwali?

Buying gold during the Diwali festival has been a very common and traditional practice by Indian citizens for ages. There is a high demand for gold especially on Dhanteras, as it signifies the essence of inviting goddess Lakshmi into their homes and bringing good fortune to their household. That gold symbolises prosperity, wealth creation and a form of security assets, making it even more appealing for the citizens. However, unlike Indian residents there are certain limitations to buying gold if you fall in the category of non-residents.

The festival of light, Diwali will commence on November 10 which is the day Dhanteras will be celebrated across the country. The festival will continue till November 14th. Also, the auspicious occasion of Laxmi Pujan will fall on November 12.

Sovereign Gold Bonds:

Firstly, NRIs cannot invest in sovereign gold bonds (SGBs)! As per the scheme directed by RBI, a person resident in India, as defined under the Foreign Exchange Management Act, 1999, is eligible to invest in SGB. Eligible investors include individuals, HUFs, trusts, universities and charitable institutions.

The SGB guidelines also state that individual investors with subsequent change in residential status from resident to non-resident may continue to hold SGB till early redemption/maturity. But NRIs are not allowed to make fresh buyings in SGBs.

SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by the Reserve Bank on behalf of the Government of India.

However, NRIs can invest in gold through physical or digital forms such as gold ETFs and mutual funds. But FEMA Act brings certain limitations to their investments.

As per ICICI Direct's website, The government has made several gold investment options available for NRI investors to invest in and make profits from. There are typically two ways to invest in gold - buying physical gold and digital investment, following are more details about the same. These are:

1. Physical gold:

Purchasing physical gold has been a long-standing tradition in India. Every auspicious occasion, be it Diwali or a wedding, is marked by the purchase of gold jewellery. Besides its cultural significance, for several years people have preferred buying gold for its incredible value and its safe-haven investment status.

There are many options to shop in physical gold as well either from any jewellery brand in stores or online. There are gold jewelleries, gold coins and bars, etc.

2. Digital gold:

Investing in digital gold is a feasible option here. Instead of holding physical gold units, NRIs can invest in gold-related financial instruments which are equivalent value as physical gold units. There are three popular digital gold investment options that every investor can explore. They are:

- E-gold: E-gold units were first introduced in 2010 by the National Stock Exchange (NSE). They are gold units that are listed and can be traded on the stock exchange. One E-gold unit's value is equivalent to the value of 1 gram of gold.

- Gold Funds: As the name suggests, Gold Funds are those Funds that have gold as their primary commodity. Gold Funds are an excellent addition to your portfolio and allow you to reap incredible returns.

- Gold ETF: Gold ETFs, are Exchange Traded Funds that have gold as their underlying asset. The ETF returns and associated risk is a replication of the gold's ongoing value in the market. It is one of the finest passive investment options you can opt for.

In conclusion, ICICI Direct's website said, "Investment in the Sovereign Gold Bond Scheme is a limited option for NRIs. It is only possible if, at the time of the investment, the investor was an Indian resident. However, if you are an NRI who has been named as a nominee of the Gold Bond Investment, you can reap the benefits. Make sure to submit the necessary documents required for KYC compliance along with a copy of your passport."

Who are NRIs?

- NRIs are those who resided in India for less than 182 days during the previous financial year, OR
- People who live outside India for employment, business, or any other purpose for an uncertain period, OR
- An Indian citizen stays in India for less than 365 days in the last four years from the current assessment year and less than 60 days during the previous year.

NRIs are those who live in other countries but are Indian nationality and hold Indian passports.

Gold Prices, November 8th:

On Wednesday, 22-carat gold in 10 gram was down by Rs 150 to Rs 56,100 in India, as compared to the price of Rs 56,250 per 10 gram of yesterday. Prices of 22-carat in 1 gram to 100 gram were down by Rs 15 to Rs 1,500 today as against the previous day.

Meanwhile, 24-carat gold price declined by Rs 160 to Rs 61,200 per 10 grams in India, compared to Rs 61,360 per 10 grams of yesterday. 1 grams to 100 grams of 24-carat is cheaper by Rs 16 to Rs 1,600 on Wednesday.

For latest performance, Rahul Kalantri, VP Commodities, Mehta Equities said, "Gold and silver prices experienced a significant correction in international markets due to changes in underlying factors. Precious metals declined in response to weaker-than-expected economic data from China, which has cast a shadow over the entire raw commodity sector. In October, China's year-on-year exports fell by 6.4%, which was below expectations. The decline in gold and silver was further exacerbated by a rebound in the dollar index and rising U.S. bond yields. The Reserve Bank of Australia raised interest rates by 25 basis points to 4.35%, citing concerns about high inflation and potentially creating room for further rate hikes by the U.S. Federal Reserve."

In today's session, Kalantri added, "we anticipate that gold and silver prices will continue to exhibit volatility. Gold has support at the $1951-1940 range and resistance at $1976-1988. For silver, the support levels are at $22.34-22.20, and resistance can be found at $22.82-23.05. In terms of Indian Rupees (INR), gold has support at Rs 60,040-59,870, with resistance at Rs 60,550 and Rs 60,730. Silver has support at Rs 70,020-69,450, while resistance can be seen at Rs 71,150 and Rs 71,630."

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