Is gold investment for anybody

including a country always

rewarding?
Why does an Individual buy gold?
• Social Prestige
• Indians are fanatic for gold.
• Individual’s belief behind gold.
• Love of women for gold.
• Security.
• Pledge.
 Industrial Uses of Gold

 Used in different industries like:

 Jewellery making
 Electronics
 Dentistry
 Medicines
 Other industrial applications.
 Gold investment – Country’s Perspective

• What amount of gold should a country hold?

• According to World Gold Council India is ranked 11th
in Gold holdings.
• India holds 7.4% (about 557.7 tonnes )of its foreign
reserves as gold.
• Gold is quietly, at the edge, becoming the world’s
second reserve currency, supplanting the Euro and
rivaling the Dollar.
Supply side

 Gold mines
 International Monetary
Fund (IMF)
 Central Bank
 Recycling of old gold
scrap
 Factors influencing gold prices

 Supply and Demand

 Bank Failures
 Rising oil prices
 Low or negative real interest rates
 Unstable government, war, invasion, crisis``
 Types of Gold Investment
 Bullion Coins

 Small gold bars

 Exchange-traded instruments
– Exchange Traded Funds
– Futures and options
 Gold accounts
 Certificates

 Structured Products
 Advantages
• Safest possible long-term investment
• Ultimate protection from bank failures
• Liquidity
• Security (and growth potential) in worst-case
scenario
• Used as currency
• Hedge
Correlation of gold with other commodities
 Gold and oil are
positively correlated.
 Gold is less volatile as
compared to stock
markets.
 Gold is held for
investment purposes
whereas silver is
mainly used for
industrial purposes
 Gold and Inflation trend in India

Year Inflation Gold (%

(%) Change)

2005 4.20 21.22

2006 4.20 21.33
2007 5.30 14.56
2008 6.40 28.48
2009 8.30 21.81
 Disadvantages

• No regular income.

• In contrast to real estate rental, there is no

income potential.
• No reliable way to forecast.
• Costs to keep.
 Conclusions
• The advantages of gold outweighs the
disadvantages.

• It is always better to have gold in the portfolio

in order to get maximum leverage.

• Gold – A currency without a country

 Thankyou!!!
Gold power…
GO GET IT!!!