HYDERABAD: Apart from their weight, what is that one more aspect Indian women are always worried about? Ever-increasing gold prices.There might not be a single day, when they do not turn to the business page of a newspaper to check the status of the gold rates on that particular day. Due to the global economic instability, more and more investors are investing in a safer haven like gold which fetches more return. Hence, the prices of these commodities have shot up drastically.Escalating gold pricesShiva Shanker, chief strategist, Efforts Capital, says, “Gold as an element is one such commodity which is independent of the economic fluctuations. Gold is very popular in India because in addition to gold being an investment option, there is also a lot of retail participation from people.” According to Shanker, a few years ago, when the economies of many countries including India were not stable, the governments started converting their foreign exchange reserves into gold, as the fluctuations in the economy will not affect the gold rate and will fetch the same price or even more. “The gold prices will only decrease when economies stabilise and when governments start selling back the gold to get back their currency,” he adds.He further explains, “Even though they are aware of the ever-increasing prices, people are still investing.I don’t see any reason why the gold prices will come down anytime soon, as this can happen only when the economies world-wide stabilise.” Another expert, Alok Agarwal, a Mumbai-based renowned investment analyst has a different say. He opines, “Globally investors are choosing gold as an investment largely because European and American economies have become weak, as dollar has weakened against the other currencies like Yen, Yuan and Rupee.Due to this, people tend to move towards gold and silver as investment options, which have a safer haven.The outlook for global economy remains to be bleak, which is the main reason why investors are moving towards gold and the prices are increasing.” “Indians, by nature avoid risks and have traditionally invested in gold, as it is a safe commodity without much price fluctuations.And now they are investing even more as, they are aware of the increase in price rise,” he adds. Vikas Jain, an investor and owner of a gold outlet in the city, says, “No matter how much the prices increase, demand for the yellow metal is going to remain the same. The only difference is that earlier, 10 out of nine people would buy gold by paying whole cash, but these days, only 50 per cent of them pay total cash.” But, how is this affecting the middle-class society? Sobha Raj, a house-wife says, “It will become very difficult for us to buy gold on different occasions. We have to pool savings for one year and then buy. Sometimes it is worth your savings, but, if the prices keep increasing, it might very tough.” Investing in goldTalking about the investment aspect of gold, there are basically three ways by which one can invest — Physical gold, which is gold in the form of ornaments, gold Exchange Traded Fund (ETF), in the form of stock units and in commodity trading/exchange, where a person predicts the future for investment similar to that of a mutual fund. Going by the present gold rate, the experts have different suggestions and options for investment, both long-term and short-term. Shanker says, “I would say, this is the time for short-term investment, which means, buying some amount of gold and selling it off in an year’s time. Longterm investment is not advisable as predictions might be risky. About the type of investment, I think both physical gold and gold ETF is advisable.But, if the quantity of the stock is more, investment in gold ETF is a better option as buying physical gold poses a huge risk to store it at home. And talking about the monthly commodity exchange, I would say people can buy a stake as the gold prices are not expected to crash anytime soon.” But, on the other hand, Alok Agarwal suggests gold ETF is a better investment as it will require lesser investment and the exchange rate is more, where as physical gold will require more investment.Weddings & festivitiesAs the wedding season is arrive in a month’s time, many customers are having a tough time deciding the right time to invest in gold. Venturing into it, Alok Agarwal says, “I would suggest that, if the customers have money, they should start buying now, as there are chances that gold prices may shoot up, whereas Shanker says, “Since the festival season has begun, I feel the gold prices are going to remain stable. It is said that after real estate, people are keen to invest on gold only. I would suggest people buy half of their requirement now and wait for another month or so and then buy the rest of it, as prices may remain stable or decrease.
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