Chandigarh, May 27
The zooming price of gold has not deterred investors from investing in the yellow metal. Rather, gold is becoming a favourite investment option not just for high net worth individuals (HNIs) and smart global investors but also for senior citizens.
The price of gold has gone up by almost Rs 2,500 per 10 gram in the past three months. From being traded at Rs 16,020 per 10 gram in February this year, the price touched Rs 18,625 per 10 gram in the bullion market today. Though the gold prices sobered marginally from yesterday’s high of Rs 18,810 per 10 gram, retail investment demand for gold is going up.
According to rough estimates, daily trading in gold futures from the Punjab and Chandigarh region is to the tune of Rs 1,200 crore to Rs 1300 crore. Sources say the maximum investment is from Ludhiana, with an average of Rs 400-500 crore being traded in gold daily. Illegal dabba trading is also very common, where investors do not have to actually buy or sell gold. They just book gold but transaction of only profit or loss takes place.
Brokers in the region say there is a lot of interest among investors in the gold Exchange Traded Fund (ETF), which is a financial instrument like a mutual fund whose value depends on the price of gold. However, unlike a mutual fund, the units of a gold ETF have to be purchased or sold on the stock market. M L Batra, a leading broker in Panchkula, said over the past one month, there has been a 20 per
cent increase in the number of investors opening Demat accounts for trading in ETFs alone. “Almost 30 per cent of these investors are senior citizens, who see higher returns coming in through ETFs. In fact, these investors are using 10 per cent of their investment corpus for investing in gold ETFs,” he added.
Interestingly, though systematic investment plan (SIP) in gold is not allowed, a number of investors are making their own SIP plans by buying an assured quantity of gold each month. An investor in Ludhiana, who has been buying 10 gram of gold each month for the past 40 months, said that his investment has gone up by 30 per cent. “I have managed to use gold as the best hedge against inflation,” he said while requesting anonymity. The volatility in the stock market and depreciation of rupee against the dollar have led to a sharp hike in gold prices.
