Gold at ₹90,000—Should you sell old jewelry to book profit?
What's the story
Gold and silver prices hit new record highs in India recently, following strong trends in the global markets.
According to PTI, the price of gold with 99.9% purity rose by ₹1,300 to a new peak of ₹90,750 per 10gm on Monday.
This surge has naturally prompted many individuals holding old gold jewelry to consider whether this is an opportune moment to sell and realize substantial profits.
So, what should you do?
Booking profits
Capitalizing on price peak can be a prudent financial move
If your jewelry was acquired years ago at significantly lower prices, selling now would translate to a considerable gain.
This profit could be utilized for various purposes, such as reinvesting in other asset classes, meeting immediate financial needs, or simply securing a return on an asset that might have been lying idle.
For those who view gold primarily as a store of value rather than an emotional heirloom, capitalizing on such a price peak can be a prudent financial move.
Capital gains
Capital gains tax will be applicable
Profits from selling old gold jewelry are subject to capital gains tax.
As per new income tax rules, if the jewelry was held for more than two years, it qualifies as long-term capital gains (LTCG) and will be taxed at 12.5%, without indexation benefits.
Keep in mind the applicable tax when selling gold, and proceed with the sale primarily if your anticipated gains remain significant after considering these tax obligations.
Future trend
Will gold prices increase in the near future?
Looking ahead, the future price of gold is intricately linked to the global economic climate, with the US playing a pivotal role.
Factors such as inflation levels, employment data, and economic growth projections in the US will heavily influence the Federal Reserve's future actions.
If inflation remains persistent, the Fed might be inclined to maintain higher interest rates, potentially putting downward pressure on gold prices.
Conversely, signs of economic slowdown or increased geopolitical instability could drive gold prices even higher.