Gold Dips Below Rs. 28,000 Level on Weak Global Cues

Gold prices dipped below the Rs. 28,000 level for the first time in 10 months, plunging by Rs. 400 to Rs. 27,700 per 10 grams in the national capital on Wednesday, on sustained selling by stockists and a weak global trend.

Silver also fell by Rs. 400 to Rs. 41,000 per kg on poor offtake by industrial units and coin makers.

Traders said persistent selling by stockists, tracking a weak trend overseas where gold fell to over 15-week low as positive US economic data backed the case for the Federal Reserve to keep on reducing monetary stimulus, mainly pulled down gold prices.

Besides, sluggish demand from jewellers in the domestic market and signs of waning demand in China also influenced the sentiment, they said.

Gold in Singapore, which normally sets price trend on the domestic front, fell 0.3 per cent to $1,260.97 an ounce - the lowest price since February 7.

In Delhi, gold of 99.9 and 99.5 per cent purity plunged by Rs. 400 each to Rs. 27,700 and Rs. 27,500 per 10 grams, respectively - a level last seen on July 22 last year.

It had lost Rs. 220 in last two sessions. Sovereign declined by Rs. 200 toRs. 24,600 per piece of 8 grams.

In a similar fashion, silver ready dropped further by Rs. 400 to Rs.41,000 per kg and weekly-based delivery by Rs. 420 to Rs. 40,350 per kg. The white metal had lost Rs. 300 in last three days.

Silver coins also plunged by Rs. 1,000 to Rs. 77,000 for buying and Rs.78,000 for selling of 100 pieces.


(Source NDTV Profit)

Gold : For Wealth Creator or Beating Inflation ?

Gold : For return generation or beating inflation ?

After discussing about equity and debt asset class, we are now going to talk about gold. From ancient time gold has a prominent position in our country. Gold is a precious metal. Almost every Indian has stored it no matter of the quantity. In India, we are gold obsessed people and the largest gold consumption country in the world. It is the reason after global decline in prices of gold its price has not gone down in India. The demand is still high after many efforts done by the government to curb the demand of it. 

Uncertain global economic market has also increased the demand of gold. Many of wealth managers now took it as a part of their portfolio. In my opinion gold as an asset class is hedge against the inflation.  One can take a limited exposure of gold in their portfolio. When equity and debt market not generate the return and even not beat the inflation then it comes to rescue for portfolio value. 

After 2007, the steep rise in gold prices has lured many investors and many of the investor has purchase significant quantity in their portfolio. I have repeatedly said to the investors and through my blogs for limited exposure of gold in the portfolio. Equity derives their value from companies, real estate derives their value from rental income but gold has no commercial use and produce nothing except gold ornament. There is nothing to evaluate the value of gold. Its price only depends on demand and supply. A very famous line about gold has said someone that the value of gold is in the eye of buyers. We cannot evaluate its true value.

Uses of Gold:

• Worldwide central banks and governments hold gold as a reserve currency in uncertain economic condition. Gold can help hedge such risk of devaluation of money, inflation and deflation.
• Many companies and banks are providing loan against gold. People pledge their gold and get loan instant. 
• In India gold mostly uses in ornament form. People in India have special emotion for gold. The buy gold for many auspicious occasions like marriages, functions, festivals and etc.
• Many fund managers buy it for portfolio diversification purpose.

Traditionally, in our country gold are purchased in the form of jewellery, coins and gold bar. It has many disadvantages like storage cost, making charges, quality issue, purchase at a premium and resell below market price. Due to these disadvantages people now adopt unconventional way to purchase gold like Gold ETF, Gold Mutual Fund, It offers lower storage cost, no quality issues, and better pricing.

If you want more information regarding investment realted or you have any other query about investment feel free to ask us.

Warm regards,

Arvind Trivedi

Certified Financial Planner

arvind.trivedi79@gmail.com

www.artofinvest.com

www.arvindtrivedicfp.blogspot.in