Why In­vest in Gold?

Consumer Voice - - Bfsi Guide / Gold Deposit Schemes -

Should you in­vest in gold? Is it a ben­e­fi­cial in­vest­ment op­tion to put in your hard-earned money? An an­swer to this ques­tion comes with two pri­mary points. First is the fact that in­vest­ing money in gold is worth it be­cause it is a hedge against in­fla­tion. Over a pe­riod of time, the re­turn on gold in­vest­ment is in line with the rate of in­fla­tion. The other as­pect that makes gold look like a good in­vest­ment is its cor­re­la­tion to eq­uity in­vest­ments. Gold is neg­a­tively con­cur­rent to eq­uity in­vest­ments. It has been no­ticed in the re­cent past that when eq­uity mar­kets per­form poorly, gold per­forms well. Hence, gold as an ad­di­tional in­vest­ment in your port­fo­lio may help in re­duc­ing the over­all volatil­ity of your port­fo­lio.

Sovereign Gold Bonds Scheme

An­nounced in Bud­get 2015–16, the Sovereign Gold Bonds Scheme is linked to gold price and is ex­pected to re­duce the de­mand for phys­i­cal gold. The bonds will of­fer the same ben­e­fits as phys­i­cal gold. They can be used as col­lat­eral for loans and can be sold or traded on stock ex­changes as they are avail­able in de­mat form. At the same time, in­vestors need not worry about hold­ing phys­i­cal gold. Un­til De­cem­ber 2015, the scheme had a to­tal sub­scrip­tion value amount­ing to Rs 246 crore. The modal­i­ties govern­ment, has is­sued such in­stru­ments car­ry­ing an an­nual in­ter­est of 2.75 per cent per year. The tenor of the bond will be for a pe­riod of eight years, with exit op­tion from the fifth year.

2015 and 30 Novem­ber 2015. Sovereign Bonds were is­sued sub­se­quently through banks and des­ig­nated post of­fices across the coun­try. buy­ing phys­i­cal gold, will of­fer in­vestors a choice to buy bonds worth one gram of gold up to a max­i­mum of 500 grams.

and sub­se­quent tranches will be no­ti­fied later. Salient fea­tures

gold and in mul­ti­ples thereof.

(phys­i­cal bonds).

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