So should you buy gold this Akshaya Tritiya, which is today? Yes - for a variety of reasons. Gold is not correlated to other financial assets like equities and bonds. Having gold in your portfolio increases diversification, apart from that it is instantly liquid in any country in the world and is virtually indestructible.
The year gone by saw a lull in gold prices and some serious short-selling by gold bears, especially after the Fed started shutting the stimulus tap progressively. But unlike in the West, it is not just about calculated returns; because, in India, we buy gold for a variety of reasons including ornamentation, investment, social compulsion as well as religious reasons.
This has ensured that the limitations imposed by the government have led to the spot prices being higher than futures prices because buyers are ready to pay a premium to secure physical delivery.
Gold has always given reasonably good returns to investors in India and it is no longer considered an exotic investment. This is borne out by the fact that our cumulative investment into gold is much higher than the world average of barely 1 per cent of investible assets. As Indians, we love gold. We always have.
We buy gold when prices go down; because, they may go up again and we buy more when prices go up because they may go up further. The highest sales of gold and silver across India take place on Dhanteras and Akshaya Tritiya.
Trying to time the markets is never a good idea. They frequently go into excess territory on either side, which is the nature of all markets. The best way is to focus on asset allocation and aim to maximise portfolio returns and minimise portfolio risk and volatility.
This is best achieved by investing in different assets via a systematic investment plan which is designed to tackle price volatility and invests in different assets with about 10 to 15 per cent of investible surplus going into gold.
There are a enough reasons and abundant choices available to buy gold. Excellent price indications also come from our commodity exchanges which are open till midnight. Hallmarked physical gold can be bought from the futures exchanges as well as via jewellers.
Similarly investors too are spoilt for choice and can invest via ETFs and mutual funds. With efficient price indicators and a wide variety of gold products available, investing in gold this Akshaya Tritiya is an easy decision
While there are buyers for physical gold in India, dollar gold prices seem unlikely to show any spurt any time soon due to the US Fed's changed strategy, Central banks may be big losers due to falling gold prices because they ramped up holdings in the last few years.
But as a diversification strategy, it is faultless. The money which would have gone into gold two years ago is now flowing towards riskier assets and equities are back in favour - witness the dramatic rise in equity indices of several countries across the development spectrum.
While a stronger US dollar pressures the price of gold, there are other factors in favour of firm gold prices. One of these is that the price of gold today, which is not much more than the cost of production i.e. if prices fall further so will supply, presumably leading to a bounce back in prices.
Also, geopolitical tensions persist in different parts of the globe and any flashpoint makes money flow into gold. Finally, China has overtaken India as the world's largest gold consumer confirming Asia's undiminished appetite for gold.
You can add to this demand. Akshaya Tritiya is seen as a good day to start a good habit - start buying gold regularly via a systematic investment plan. And do it for the right reasons.
The year gone by saw a lull in gold prices and some serious short-selling by gold bears, especially after the Fed started shutting the stimulus tap progressively. But unlike in the West, it is not just about calculated returns; because, in India, we buy gold for a variety of reasons including ornamentation, investment, social compulsion as well as religious reasons.
This has ensured that the limitations imposed by the government have led to the spot prices being higher than futures prices because buyers are ready to pay a premium to secure physical delivery.
Gold has always given reasonably good returns to investors in India and it is no longer considered an exotic investment. This is borne out by the fact that our cumulative investment into gold is much higher than the world average of barely 1 per cent of investible assets. As Indians, we love gold. We always have.
We buy gold when prices go down; because, they may go up again and we buy more when prices go up because they may go up further. The highest sales of gold and silver across India take place on Dhanteras and Akshaya Tritiya.
Trying to time the markets is never a good idea. They frequently go into excess territory on either side, which is the nature of all markets. The best way is to focus on asset allocation and aim to maximise portfolio returns and minimise portfolio risk and volatility.
This is best achieved by investing in different assets via a systematic investment plan which is designed to tackle price volatility and invests in different assets with about 10 to 15 per cent of investible surplus going into gold.
There are a enough reasons and abundant choices available to buy gold. Excellent price indications also come from our commodity exchanges which are open till midnight. Hallmarked physical gold can be bought from the futures exchanges as well as via jewellers.
Similarly investors too are spoilt for choice and can invest via ETFs and mutual funds. With efficient price indicators and a wide variety of gold products available, investing in gold this Akshaya Tritiya is an easy decision
While there are buyers for physical gold in India, dollar gold prices seem unlikely to show any spurt any time soon due to the US Fed's changed strategy, Central banks may be big losers due to falling gold prices because they ramped up holdings in the last few years.
But as a diversification strategy, it is faultless. The money which would have gone into gold two years ago is now flowing towards riskier assets and equities are back in favour - witness the dramatic rise in equity indices of several countries across the development spectrum.
While a stronger US dollar pressures the price of gold, there are other factors in favour of firm gold prices. One of these is that the price of gold today, which is not much more than the cost of production i.e. if prices fall further so will supply, presumably leading to a bounce back in prices.
Also, geopolitical tensions persist in different parts of the globe and any flashpoint makes money flow into gold. Finally, China has overtaken India as the world's largest gold consumer confirming Asia's undiminished appetite for gold.
You can add to this demand. Akshaya Tritiya is seen as a good day to start a good habit - start buying gold regularly via a systematic investment plan. And do it for the right reasons.
