close_game
close_game

Why Gold is your best bet today

Hindustan Times | ByManish Pachouly, Mumbai
Oct 26, 2008 12:14 AM IST

It’s Dhanteras, the auspicious day that Hindus buy precious metals to usher in Diwali, but there is a sound economic reason for you to pick gold, reports Manish Pachouly.

It’s Dhanteras, the auspicious day that Hindus buy precious metals to usher in Diwali, but there is a sound economic reason for you to pick gold.

HT Image
HT Image

At a time when investment in almost everything else — from stock to currency and oil futures — is fraught with uncertainty, investors and traders are increasingly turning to gold because it is safe and promises good returns.
Of course, it’s also a good way to honour Dhanavantri, the physician to the Gods, after whom Dhanteras is so called.

Gold prices have nearly doubled in the past six years and experts predict a continued climb, both in the short and the longer term, because supplies will continue to trail demand for several years.

“People always want something to bet on,” said Prakash Khandelwal, a Mumbai broker. “Right now, it is gold.”

Gold sales through this month have risen about 66 per cent from a year ago, according to the All India Gems & Jewellery Trade Federation. The federation’s figures don’t include fast growing sale of gold coins by banks and post offices that now account for 10 per cent total gold sales in the country.

“I am short of salesmen because of the rush,” said Kumar Jain Kumar Jain, who owns a jewellery store, Umedmal Tilockchand Zaveri, in South Mumbai.

“People are booking gold in advance for Dhanteras.” Jain said.

In recent days, gold prices have fallen as central banks worldwide have been selling gold to boost liquidity. As a result, prices have become more attractive than they were some weeks ago. On Saturday, gold prices closed at Rs 11,900 per 10 grams.

Investing in gold makes sense, also because “it is extremely liquid and is a good hedge against inflation”, said Keyur Shah, Associate Director of World Gold Council, a grouping of the world’s leading gold producers.
Like everything else that is trade, gold prices also go up and down, but are much less volatile than stocks, Shah said.

“It is the best investment for long run,” said Vanita Gowani, a Mumbai-based garment trader. “It would be profitable even for my next generation.”

SHARE THIS ARTICLE ON
SHARE
Story Saved
Live Score
Saved Articles
Following
My Reads
Sign out
New Delhi 0C
Saturday, February 08, 2025
Start 14 Days Free Trial Subscribe Now
Follow Us On