Sunday, January 03, 2010

Will gold turn out to be the asset class of choice in the next decade as well?


"Amidst all the madness there was one asset class that remained rock solid right till the end. In fact, it ended each year of the decade higher than the price at which it started the year. Thus, if there is one widely accepted asset class that deserves the title to be the asset of the decade, it is none other than the yellow metal gold. As per a story in LiveMint, Gold witnessed a near fourfold jump in its price over the past decade. It beat other contenders like crude oil and the Indian Sensex, which were up around three-fold, by a handsome margin.

Now, to the question that we are sure would be on most investors' minds. Will Gold outperform in the coming decade as well? We may not like to hazard a guess on that one. But we are fairly certain about is its ability to continue giving attractive returns. As one financial expert rightly put it, 'Gold no doubt is a speculation but it is a speculation on a certainty. And that certainty is the debasement of currencies.' Thus, gold bugs can continue to keep the faith. But do not go overboard with your gold investment."

My recommendation :- Go with Gold ETF, you don't loose on redemtion(but for the brokerage) and it is faster to get it redemed. If it is ornament it has got utility vaue but would attract lesser price while redemption and is little more tougher to get cash in exchange of gold as most of the Jewellery shops would prefer a gold to gold exchange ( old for new ornaments)

1 comment:

Gowrisankar said...

As per ET dt 8th MAy 2010 - NEW DELHI: Public sector trading major MMTC today said gold prices may hit a record high this month on robust demand.

"Gold prices in India may hit a record any time in May because of firm demand," MMTC Chairman and Managing Director Sanjeev Batra said today. MMTC is the largest importer of gold in the country.

Gold prices in India had touched a record high of Rs 18,340 per ten grams in December, 2009.

He also said that MMTC is likely to import seven per cent more gold this fiscal, at 200 tonnes, compared to 2009-10.

"MMTC is expected to import 200 tonnes of gold this fiscal compared to 186.83 tonnes in 2009-10. India, as a whole, imported 738.81 tonnes last fiscal," he said.

Prices of the precious metal today skyrocketed by Rs 495 to a five-month high of Rs 18,000 per ten grams in the Delhi bullion market on heavy buying driven by an overseas rally. The level was last seen on November 26, 2009.

Gold in global markets, which normally sets the price trend on the domestic front, recorded a handsome rally of USD 33.20 to USD 1,208.80 an ounce last evening.

MMTC's net profits surged by 147.6 per cent to Rs 98.95 crore for the fourth quarter ended March 31, 2010, over the same period last year.

Its net sales grew by 253.5 per cent to Rs 17,230.05 crore for the quarter in comparison to the same period last year.