Chandigarh, September 20
High prices of the yellow metal notwithstanding, gold is fast emerging as a major investment option for investors in the region. Despite prices having risen by almost Rs 4,000 per 10 grams since last year, dollar volatility and fall in general demand for jewellery, retail investment demand for gold has taken a sharp upswing.
According to rough estimates, daily trading in gold futures from Punjab and Chandigarh region is to the tune of Rs 1,200 crore to Rs 1,300 crore. Though the maximum investment is being seen from Ludhiana (an average of Rs 400-500 crore), investors in Amritsar, Jalandhar and Chandigarh are also waking up to the benefits of investing in gold futures, sources say.
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Yellow Shine
- Volume of daily trade in gold futures from Punjab is Rs 1,200-1,300 crore
- Gold ETFs now comprise 10 per cent of equity market as compared to one per cent last year.
- Illegal Dabba trading is very
common.
- Investors do not have to actually buy or sell gold, just book it and cash transaction of only profit or loss takes place.
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Interestingly, it is not just the jewellers and commodity investors from the region who are trading in gold futures. Brokerage
houses in the region say a number of senior citizens and small investors have also started investing in the precious metal. After all, gold now seems to be the only investment that is giving high returns. Sources said people are also selling their forex and instead investing in gold futures.
Amitabh Nijhawan, state head of Fortune Equity Brokers India, said though the stock markets across the world have been crumbling since last year, gold has maintained a steady rise.
“As compared to gold being traded around Rs 12,500 per lot (a lot is for 10 gm) last year, it is now being traded at Rs 16,200 per lot now. The allowing of smaller lots of gold for futures trading (a smaller lot of 10 gm is now allowed for trading as compared to just 1kg of gold lots allowed for trading earlier), has increased the scope for investment in the metal to a large number of investors. Since there is no securities’ transaction tax on commodity trading, it has added to the popularity of trading in the precious metal,” he said.
His company was facilitating daily trading worth Rs 200 crore in gold futures in Ludhiana alone, Nijhawan said.
ML Batra, a business associate of Angel Broking in Panchkula, said there was a lot of interest in the gold exchange traded fund (ETF). Gold ETF is a financial instrument like a mutual fund whose value depends on the price of gold.
However, unlike a mutual fund, gold ETF units have to be purchased or sold on the stock market.
Ever since the markets have fallen, investors are also buying gold ETFs on the National Stock Exchange. “Last year, gold ETFs constituted just one per cent of the total equity market. This has now risen to around 10 per cent of the equity market,” he said.
