Best Gold Stocks in India to buy for Long Term Investing in 2023

Gold has been an integral part of the Indian economy and a foundation of savings in many Indian households. Therefore, by describing the resilience of the gold commodity, the World Gold Council (WGC) states that the investment demand for gold stocks has been increasing since 2001 by 15% on an annual basis. 

Thus, the gold industry has itself become an inflexion point between the rising prices of gold shares and the changing industry trends. So the question is whether you should invest in the gold stock price in India. 

Well, the simple answer to this question is an English proverb, ‘When we have gold, we are in fear; when we have none, we are in danger.’ 

While buying physical gold has been a traditional way of gold investing, gold related stocks in India have emerged as a popular alternative in recent times. In this blog, we will explore why investing in gold share prices in India is a good idea and what gold investing in India can offer you.

What are Gold Stocks?

Gold in its purest form is a bright, slightly reddish yellow, dense, soft malleable and ductile metal. Humans have valued gold for its lustrous colour and its resistance to tarnishing. Because of its occurrence in nature in minute amounts, gold is an expensive metal. Apart from being considered a symbol of immortality in mythology, today gold is lent and borrowed in the same way as money. 

Thus, apart from having a form of physical gold, many have turned to invest in gold-related companies in the stock market. Gold shares in India are stocks of companies that are engaged in the exploration, mining, and refining of gold. These companies are typically involved in various stages of the gold mining process, including the exploration of potential mining sites, the extraction of gold from the ground, and the processing and refining of the metal for sale. 

You can buy shares of these companies on stock exchanges and benefit from the profits generated by the gold mining stock industry. Additionally, the value of gold stocks is directly linked to the gold share price in India and can fluctuate based on supply and demand, mining costs, and global economic conditions. Therefore, investment in gold stocks in India can be a way to gain exposure to the gold stock market without owning physical gold and can offer you diversification and potential for long-term growth.

The Indian Gold Market is in its Golden Age

Considered the material safe haven for people all around the world, Gold was discovered by an Egyptian alchemist named Zosimos. 

While every middle class household might still indulge in debates on ‘Gold vs stock market’, that’s not the case with most investors. In recent years, the Indian gold stock market has witnessed significant growth, driven by rising demand from both individual investors and institutional investors. The market has also been influenced by the government’s policies, such as the gold import restrictions and the introduction of the Gold Monetization Scheme. In addition, the demand for gold in India is heavily influenced by cultural and religious factors, such as festivals and weddings.

The future projections of gold stocks in India remain positive. The country’s growing middle class and increasing disposable income are expected to drive demand for gold, particularly for investment purposes. The Indian government’s policies are also expected to have a positive impact on the gold rate in share market. The introduction of the Gold Monetization Scheme aims to mobilize the country’s idle gold and reduce gold imports, which could lead to increased supply and lower prices.

Furthermore, the growing trend of digital gold is also expected to boost the gold stock market in India. Digital gold allows you to buy and sell gold in small denominations and has recently gained popularity.

List of Best Gold Share Prices in India

India’s gold stock market has been a significant player in the global gold industry, and as such, the popular gold stock prices in India are closely watched by investors and traders worldwide. Let’s take a look at some of the gold stock prices of popular companies.

Company Name	Sub-Sector	Market Cap	Share Price
Titan Company Ltd	Precious Metals & Jewellery	₹2,55,416 Cr	₹3,082.2
Rajesh Exports Ltd	Precious Metals & Jewellery	₹16,984 Cr	₹493.15
Kalyan Jewellers India Ltd	Precious Metals & Jewellery	₹11,521 Cr	₹232.8
Nippon India ETF Gold BeES	Gold	₹15,589 Cr	₹312.25
SBI-ETF Gold	Gold	₹5,25,213 Cr	₹567.4

The data is from 29th August 2023.  However, for real-time updates on stock prices and market trends, visit the smallcase stocks collection today!

Why invest in Gold Stocks?

Investing in gold stocks has traditionally been driven by its role as a hedge against inflation. Gold’s unique property as an inflation hedge becomes more apparent in the long term. When inflation rates increase, the value of a currency tends to decline. Historically, major currencies have consistently depreciated in comparison to gold over extended periods.

In recent years, gold stock prices have displayed remarkable growth, doubling in value over the last five years and quadrupling in a decade. In a country like India, where many savings instruments struggle to provide substantial returns, gold becomes an attractive option when the inflation rate surpasses prevailing interest rates.

Furthermore, when we examine the annualized return of gold stocks over a decade, it consistently outpaces inflation. In practical terms, this signifies that gold stocks offer individuals a genuine rate of return, preserving and potentially increasing their purchasing power in the face of inflation.

Gold Stocks of Companies: A Brief Overview

Let’s review the best gold stocks to invest in India:

Titan Company Ltd:

An Indian multinational company that sells watches, jewellery, eyewear, and accessories. It was incorporated on July 26, 1984, and is headquartered in Bengaluru, India. Xerxes Desai is the founder and is a subsidiary of the Tata Group. The Indian stock exchange also lists Titan Company Ltd, which is one of the leading gold stocks in India.

Rajesh Exports Ltd:

A gold retailer, exporter, and manufacturer based in Bangalore, India. Incorporated in 1989 and is headed by Rajesh Mehta. It is one of the largest jewellery manufacturers in the world and also has a presence in the gold refinery business. Investors closely monitor Rajesh Exports Ltd’s gold share prices in India.

Kalyan Jewellers India Ltd:

An Indian jewellery store chain founded by T. S. Kalyanaraman in 1993. Its headquarters are in Thrissur, Kerala, India, and it has over 140 showrooms across India and the Middle East. Kalyan Jewellers India Ltd offers a range of gold, diamond, and other precious metal jewellery, and the company’s gold stocks are popular in the Indian share market. It is one of the most prestigious gold company in India. 

How to Invest in Gold Stocks in India via smallcase?

Investing in gold stocks in India can be done using smallcase, an investment platform that allows you to buy and sell themed portfolios of stocks, including gold-related stocks. Here are the steps to invest in smallcase so that you can reap the benefits of gold stocks in India:

• Opening a Demat Account: The first step is to open a demat account online with a registered stockbroker. Therefore, to hold the shares purchased through smallcase, you need a Demat account. You can open a Demat account online by providing your details and submitting the necessary documents.

• Choosing a Broker: Next, you need to choose a registered stockbroker who offers smallcase portfolios that includes gold stocks. Some popular stockbrokers in India include Zerodha, HDFC Securities, and ICICI Direct. Thus, you can compare the brokerage fees and services offered by different brokers to choose the one that suits their needs.

• Placing an Order: Once you open the demat account and choose a broker, you can log in to the smallcase platform and select a gold-related smallcase portfolio like Equity and Gold. The portfolio will include gold stocks, and the weightage of these stocks will be based on the portfolio strategy.

At last, you can choose the amount that you want to invest and place an order. The broker will execute the order and credit the shares to your Demat account.

Other ways to invest in Gold Stocks

There are multiple ways through which you can easily do gold investing in India. Hence, we have listed some of the best ways to invest in gold for you-

ETFs:

Exchange-traded funds (ETFs) that track the price of gold are a popular way to invest in gold shares. These ETFs invest in physical gold or gold futures and offer you the ability to buy and sell shares like any other stock. 

Gold Mutual Funds:

Gold mutual funds are another way to invest in gold stock in India. The funds invest in companies involved in mining and the production of gold mining stocks. Their performance is affected by factors such as market conditions and company-specific risks, although it is generally tied to the price of gold. So, find the best gold mutual fund to invest in, today!

Gold Mining Stocks Companies:

Investing in individual mining gold company stocks is another option for gaining exposure to gold stocks. These top gold companies are involved in the exploration, development, and production of gold, and their performance is tied to the price of gold as well as their own operational and financial performance.

Equity & Gold smallcase by Windmill Capital

Performance Parameters to Consider Before Investing in Gold Stocks

Before investing in gold stocks, there are several factors that you should consider before making informed decisions. Here are some key factors to consider:

• Risk vs. Reward: You should carefully evaluate the risk and potential rewards associated with investing in gold stocks. Thus, various factors such as geopolitical events, changes in gold prices, and company-specific risks can affect the performance of gold stocks, which can be volatile.

• Past Performance: You should analyze the past performance of gold stocks before investing. This can help you identify patterns and trends in the performance of individual stocks, ETFs, or mutual funds. However, past performance is not a guarantee of future results. So you may use it as a reference point rather than a definitive guide.

• Management Quality: You should evaluate the management quality of the companies you are investing in. This can include factors such as the experience and track record of the management team, strategy, and financial position. Investors generally consider companies with strong management teams and solid financial positions as more attractive investment opportunities.

• Fees and Expenses: You should consider the fees and expenses associated with investing in gold shares. ETFs and mutual funds typically charge management fees, which can eat into investment returns over time. Therefore, you should compare the fees and expenses of different investment options. Then choose those that offer competitive fees and a good value proposition.

Tips for Gold Share Investing

Gold share investing can be an effective way to diversify an investment portfolio and potentially benefit from rising gold prices. To increase your chances of success, you should approach gold share investing with a strategy. Here are some tips for successful gold portfolio investing:

• Stay Informed: Staying informed about gold share prices and gold mining stocks is crucial for successful gold share investing. This includes monitoring gold prices, keeping up with industry news, and staying informed about individual gold mining stocks. You can use this information to make informed investment decisions and adjust your portfolios as needed.

• Don’t Put too Much Risk: It’s important to invest within one’s means and not put too much at risk. Gold share investing can be volatile, and the price of gold can fluctuate rapidly. You should set realistic investment goals and invest only what you can afford to lose without affecting your financial well-being.

• Diversify Your Portfolio: Diversification is key to successful investing, and gold share investing is no exception. You should consider diversifying the chosen portfolio by investing in multiple gold mining stocks or gold-related funds. This can help reduce the risk associated with individual stock performance and provide a more balanced portfolio.

Equity and Gold: An Inverse Relationship

All that glitters is Gold and yes, this is the English proverb even the stock market swears by. 

Well, those who have only invested in equities (ownership interest of shareholders in a company), will back us up here.

Hence, it’s an oft-stated fact that equity and gold do not go hand in hand. Meaning when the price of one goes up, the other tends to go down. Thus, you may ask why this happens. 

This is because you may often move your money from one asset class to the other as a way of diversifying your portfolio and managing risk. Thus, when the stock market is doing well and equities are rising, naturally, you may feel more confident. Next, you’ll be willing to take on more risk, which can lead to a decrease in demand for gold. 

Conversely, when the stock market is struggling and equities are falling, you may become more risk-averse and seek out safe-haven assets like gold, which can cause the price of gold to rise. Thus, to mitigate risks, you can invest in our Equity & Gold portfolio to avoid the hassle of moving your money here and there. This smallcase invests in Equity & Gold, fixing their weights to 70% and 30% where you have access to large-cap companies.

Advantages of investing in Gold Stocks.

Here are a few advantages of investing in gold stocks:

• Hedge against inflation: Gold stocks serve as an effective hedge against inflation, showing resilience during economic downturns and market volatility. It has a track record of long-term asset appreciation, making it a valuable addition to your investment portfolio.

• Diversification: Diversifying your investment portfolio is easy and convenient with gold stocks. 

• Low Cost: You can commence your gold investment journey with a small initial amount and save regularly for the long term.

• Liquidity: Gold stocks offer easy liquidity, allowing you to subscribe to and redeem them as needed.

• Long Term Capital Gains- Some gold funds, like SBI Gold Fund, are classified as non-equity products for tax purposes. This classification enables you to claim long-term capital gains tax benefits after holding the investment for a year.

To Sum Things Up…

Gold has been a valuable asset for centuries, and its popularity as an investment option remains strong to this day. Evaluation of the gold share price India of different gold mining companies is an important indicator for you to look at because various factors influence the gold stock market.

Additionally, the gold price stock market is subject to fluctuations. Therefore, it is essential to conduct thorough research and analysis. Before investing in any gold stock ensure that the investment aligns with one’s financial goals and risk tolerance. Thus, gold has historically shown to be a reliable long-term investment option. Additionally, it can be an excellent addition to a diversified portfolio.

Overall, you can invest in several gold stocks under one roof. How? By investing in smallcase.

At smallcase, we provide a wide range of portfolios that certainly reflect a theme, idea, or objective. Our portfolios are designed by SEBI-registered professionals and are simple to use. 
So, what are you waiting for? Invest in gold through smallcase today!

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