Gold

A REPORT
ON
Gold- Investment Rationale
Project Report
Submitted To
SCHOOL OF MANAGEMENT SCIENCES

For The Award Of
Post Graduate Diploma in Management
Submitted By
Prashant Kumar
(Roll No. : PG/08/32)

LUCKNOW
A REPORT
ON
Gold- Investment Rationale
Submitted By
Prashant Kumar
(Roll No. : PG/08/26)

LUCKNOW
Abstract:
This project report is basically done on the gold which is a component traded in the
commodity market. Gold is an inflation hedge & also short-term fluctuations in
Gold offer good potential for trading. It is in the upward trend and in the current it
is safe to invest in the gold.
The basic objective behind the project is analyzing the gold market the
factors affecting it and fluctuation in the gold market.
This project report will help the investors to analyze the right time for
investment in the gold. They will also come to know about the various factors
which affect the gold market. While doing this project the history and the company
profile are basically searched either from the internet or by the literature review of
the company. This means that it is basically based on the secondary source. Also
the topic related concepts are done on the basis of the secondary sources. The data
for the analysis is taken either by the consulting the companys employees or from
the net. So it is partially primary and partially secondary. The analysis part is done
with the help of Microsoft EXCEL by computing the required output. Finally the
conclusions and recommendations have been written on the self finding basis.
DECLARATION
I hereby state that the Project Report titled Gold An Investment Rationale.
submitted in partial fulfillment of the degree of Post Graduate Diploma In
Management is an original work done entirely by me and is based entirely on my
own observations. It has not previously formed the basis for the award of any other
degree, diploma, fellowship or any other similar title. The facts presented here are
true to the best of my knowledge.
Prashant Kumar
PG/08/26
Table of Contents
Contents
P.No
1) Acknowledgements.
2) Company Profile.
3) Introduction of the Project.
21
Preface
22
Objective of the project
24
Scope of the project
24
Methodology
24
Literature Review
25
Basic terms of Investment
26
Short term & Long Term Investment Options
27
History of Gold
30
Gold as Money
30
Ways of Investment in Gold
32
4) Factors Affecting Gold and Their Analysis
Crude Oil
US Dollar
Repo Rate
Inflation Rate
39
40
45
49
55
59
Bank Failure
Stock Market
Gold Anti Trust Committee
Real Interest Rate
War & Other Crisis
Demand & Supply
60
64
65
65
66
69
5) Scenario Analysis
75
6) Findings
77
7)Limitations
78
8) Recommendations
80
9) References
Acknowledgements
This project simply shows the entire dedication of me and the people who have coordinated for
successful accomplishment in this project. It shows the knowledge, skill and experience of able
minded people. I am greatly obliged to Unicon Investment Solutions for providing me this
opportunity to take up this project as long as a platform to learn and enhance my professional
skill.
I would like to express my deep sense of gratitude to Mr. Sachin Jain Product Manager
(National) Mutual Fund, Unicon Investment Solutions, my corporate guide, for his kind help
and support and valuable guidance throughout the project. I am thankful to him for providing me
with necessary insights and helping me out at every single step. I also express my deep gratitude
to Mr. Dhritiman Chakraborty Senior Manager Research, Unicon Investment Solutions.
I am highly thankful to Dr. Sudhir Sharan my Director under whose able guidance this project
work was carried out. I thank him for his continuous support and mentoring during the tenure of
the project. I am also thankful to my academic guide Dr. Vandana Shrivastva with deep of my
heart who has given me their co-ordination from time to time. I am also thankful to the entire
teaching staff without which this acknowledgement will be incomplete.
Prashant Kumar
PGDM
PG/08/26
SMS- Lucknow
COMPANY PROFILE
Company Profile:
Basic Information:
Company Name
Business Type
Product/Services
Address
Brands
No of Employees
Company website
Unicon Investment Solutions

Trading company, Distributor/Wholesaler
Mutual Funds, Insurance, NFO, IPO,Equity,Debt
26, IIIrd Floor, Pusa Road, Karol Bagh, New Delhi
Kotak,Hdfc,Hsbc,Reliance,ICICI,BSP etc
Above 1000 people
www.uniconindia.in
Ownership & Capital:

Year Established
Registered Capital
Ownership Type
Legal Representative
2004
Above US $ 100 million
Private Limitated Company
Mr. Gajendra Nagpal
Trade & Market: South East Asia.
10
Detail Profile:
Unicon is a financial services company which has emerged as a one stop investment solution
provider. It was founded in 2004 by two visionary and flamboyant entrepreneurs, Mr. Gajendra
Nagpal and Mr. Ram Gupta who possess expertise in the field of finance .The Company is
headquartered in New Delhi, and has its corporate office in Mumbai with regional offices in
Kolkata, Chennai, Hyderabad and Noida.
Unicon is a professionally managed company with outstanding managerial acumen and
cumulative experience of more than 200 years in the financial markets. the company is supported
by more 3500 uniconians and has an extensive network of over 100 branches , 600 plus business
partner locations & 2500 remisers providing it with a national footprint.
With a customer base of over 200000, the Unicon Group has an eye for the intricate financial
needs of its clients and caters to both their short term and long term financial needs through a
comprehensive bouquet of investment services. These services range from offline and online
trading in equity, commodities, currency derivatives to debt markets to corporate finance and
portfolio management services. The company has a sizable presence in the distribution of 3 rd
party financial products like mutual funds, insurance products and property broking. It also
provides expert Advisory on life insurance, General insurance, mutual funds and IPOS. The
distribution network is backed by in house back office support to provide prompt and efficient
customer service.
The equity broking arm UNICON Securities Pvt. Ltd offers personalized premium services
on the NSE, BSE & Derivatives market. The commodity broking arm UNICON commodities
Pvt. Ltd offers Services in commodity trading on NCDEX & MCX. The UNICON Group Also
has PCG division providing investment solutions for High Net worth Individuals. UNICON can
boast of some of the most respected names in the private equity space like Sequoia Capital and
Nexus India capital as its shareholders.
11
Unicon has been founded with the aim of providing world class investing experience to hitherto
undeserved investor community. The technology today has made it possible to reach out to the
last person in financial market & give him the same level of service which was available to only
the selected few. They give personalized premium service with reasonable commissions on the
NSE, BSE & Derivative market through their equity broking arm Unicon securities Pvt. Ltd.
With their sophisticated technology we can trade through our computer & if we want human
touch we can also deal through their relationship managers out of their more than 100 branches
across the nation.
Mission of the company:

To create long term value by empowering individual investors through superior financial services
supported by culture based on highest level of team work, efficiency & integrity.
Vision of the company:

To provide the most useful and ethical investment solutions guided by values driven approach to
growth, client service and employee development.
12
Management Team:
Name
Designation
Mr. Gajendra Nagpal-
Founder & CEO
Mr. Ram M Gupta
Co- Founder & President
Mr. Y.P. Narang
Head- Fixed Income group
Mr. Sandeep Arora
Chief Operating Officer
Mr. Vikas Mallan
Chief Financial Officer
Mr. Trinadh Kiran
National Head (E-Broking)
Mr. Subhash Nagpal -
Director (P & D)
Ms. Anjali Mukhija -
Chief Compliance Officer
Mr. Vijay Chopra
National Head (Buss.Alliances)
Mr. Anurag Nayar
Chief Technology Officer
Mr. Ashish Kukreja -
Head (Client Relations)
Ms. Deepa Mohamed -
Head (HR & Training)
13
Group Companies:
14
SWOT ANALYSIS OF UNICON:

Strengths
Professional Services
Customized solution to customer
needs
Support of extensive network of
100 branches and 600 franchises
across India
Strong brand Name
Regular information flow and
research
Opportunities
Growing Indian economy and
advent of young investors
Savings of Indians are very high
and thus can be channelized
investment
Financial product penetration is
very low in Tier II and III cities.
Financial product penetration is low
in Corporate
Changes to be incorporated in-
Weakness
Lack of strong MIS framework
Usage of manual paper based
processes for reconciliation
Absence of sustainable source of
income
Market Plan
Increase financial awareness
amongst investors
Promote financial planning and its
benefits
Penetrate retail in tier II and III
cities
Penetrate HNI and corporate
segments within metro
Extend presence of brand in all
states in India
Product Plan
Selling all products from every
AMC and insurance companies.
Cross selling between mutual
funds,Life insurance, general
insurance, IPO and fixed Deposit
scheme
Financial Plan
Better incentive plan to boost sales
Make efforts to increase overall
productivity
Increase Turnover
Increase Profit
Threat
Global economic recession
Financial Markets in hibernation
Enterprises in distress
Financial intermediaries in pain
People Plan
Increase team size to 250 across the
country and activate maximum
number of branches
Recruitment of quality manpower to
improve sales
Improve motivation level within
15
teams
Product &Services:
Unicon customers have the advantage of trading in all the market segments in the same window,
as they understand the need of transactions to be executed with high speed and reduced time. At
the same time, they have the advantage of having all Advisory services for Life Insurance,
General Insurance, Mutual Funds and IPOs also.
Unicon is a customer focused financial services organization providing a range of investment
solutions to our customers. They work with clients to meet their overall investment objectives
and achieve their financial goals. Their clients have the opportunity to get personalized services
depending on their investment profiles. Their personalized approach enables clients to achieve
their total investment objectives.
The Key products offering are as follows:
Equity- It is of two typesUnicon Plus-It is browser based trading terminal that can be accessed by a unique ID and
password. This facility is available to all online customers the moment they get registered.
Features:
Trading at NSE, BSE & Derivatives on single screen.
Add multiple scrips on the market watch
Greater exposure for trading on the available margin.
Common window for display of market watch and order execution.
Real time updating of exposure and portfolio while trading.
Offline order placement facility.
Stop loss feature.
Competitive Brokerages.
16
Banking integration with ICICI Bank, HDFC Bank, AXIS Bank.

Proxy link to enable trading behind firewalls.
Unicon swift- It is application based terminal for active traders. It provides better speed, greater
analytical features & priority access to Relationship Managers.
Features:
Trading at NSE, BSE & Derivatives on the single screen.
Add any number of scrips in the market watch.
Tick by tick live updation of Intraday chart.
Greater exposure for trading on the margin available.
Common window for market watch and order execution.
Key board driven short cuts for punching orders quickly.
Real time updation of exposure & portfolio.
Facility to customize any number of portfolio & watch lists.
Best 5 bids and offers, updated live for all scripts.
Facility to cancel all pending orders with a single click.
Instant trade confirmations.
Banking integration with ICICI Bank, HDFC Bank, Axis bank,
Bank of India, Corporation bank, Karnataka bank, Vijaya Bank etc.
Commodity-
Unicon offers a unique feature of a single screen trading platform in MCX and NCDEX
Unicon offers both offline & online trading platforms. You can walk in or place your orders
through telephone at any of our branch locations.
Features:
Live market watch for commodity market (NCDEX , MCX) in one screen.
17
Add any number of scrips in the market watch.

Tick by tick live updation of intraday chart.
Greater exposure for trading on the margin available.

Common window for market watch and order execution.
Keyboard driven shortcuts for punching order
DepositoryIt offers dematerialization services as a participant in central Depository Services Ltd
through its Depository operations. The company believes in efficient and cost-effective and
integrated service support to its brokerage business. Unicon securities Pvt. Ltd, as a
depository participant, will offer depository accounts for individual investors as well as
corporate which will enable them to transact in the dematerialized segment, without any
hassles.
Depository offers a safe, convenient way to hold securities as compared to holding securities
in paper form. Their service provides an integrated single platform for all their clients
ensuring a risk free, efficient and prompt depository process.
DistributionUnicon is a fast emerging as a leader in the insurance and mutual funds distribution
space. It has over 100 branches and a huge number of Business Development
Executives who help to source and service the customers throughout the country.
Unicon is fast becoming the preferred Vendor Independent distribution houses because
of providing efficient service like free collection of cheques , keeping track of the
premiums etc. to the customers.
Unicon offers the following distribution products: IPOs
Mutual Funds
Insurance
18
Properties
NRI service-
With India becoming the epicenter of growth the Global Indian feels the needs to be
connected to the domestic growth story. It now offers a convenient and hassle free way of
investing in the Indian securities Market to the people who are living outside India and wish
to participate in the Indian growth story.
Back office-
Unicon through its online back-office aims to increase the transparency and provides us the
link to view the details of our account online any time and any where.
Fixed Income-
The fixed income vertical of UNICON group deals in sovereign paper, money market/fixed
income instruments and merchant banking activities.
19
Competitors of UNICON:
India Bulls
Reliance Money
India infoline
Narayan Securities Pvt. Ltd
Vivek Financial Focus Ltd
Multiplex Capital Ltd
Nikunj stock Broker Ltd
O J financial services Ltd
Elite stock management Ltd
Mani stock brokers Ltd
Trans Asia securities Pvt. Ltd
SMC
RR
Centrum
20
INTRODUCTION OF THE PROJECT
Preface:
Gold An Investment Paradise
21
Gold has been synonymous to wealth and prosperity through the ages. The history of Gold dates
back to as early as 4000 BC when the prehistoric men used it as a tool. Since then Gold has filled
the pages of history as the divine metal that has attracted the attention of men powerful and
otherwise. Gold was the source of power for the kings. Wars were waged; lives were lost as
kingdoms piled up and hoarded tonnes of Gold. In the modern history, Gold became the
international currency as the Gold standard came into existence. Even after the dismantling of
Gold standard, Gold existed as the backbone of international trade and economics as the US
accumulated tones of yellow metal. Till today, Gold has retained its basic use as a commodity
without losing its sheen as a currency.
Gold, because of its ability to protect the wealth of investors can be an ideal addition to a
portfolio. Also the short-term fluctuations in Gold offer good potential for trading. Gold has been
on its long-term upwards trajectory which began in early 2001. This long-term move has been
punctuated by short-term pullbacks offering opportunities for late entrants to join the
bandwagon. With the US economy outgrowing the league of developed nations during the last
two years coupled with the worsening of long-term structural weaknesses and the subsequent
movements in the USD have moved the focus away from Golds use as a commodity. However
the long-term fundamentals of the yellow metal have also undergone a significant change with
the mining output falling quite steadily during the last decade coupled with an evergreen demand
especially from Asia.
This report analyses the long-term and short-term fundamental factors expected to move Gold
prices. We believe that the short-term weakness expected in gold is a great opportunity for the
late-comers to join the great Gold. Strategically, gold is one of the two most important
commodities on the planet along with crude oil. Gold has been historically recognized as the
ultimate store of value and method of payment. The following characteristics of Gold have
enabled it play this role:
It is durable, homogenous and divisible
Golds rarity gives it intrinsic value and that value is high per unit of volume.
22
Its value is recognized across the globe and is traded in a continuous market.
Gold is the only financial medium of exchange that is not someone elses liability.
In updating our price outlook, we have considered the following factors:
Investment demand will continue to be the prime driver for the rally in Gold prices,
As economic factors will make gold more attractive compared to other financial assets.
Furthermore strong buying support from the Central Banks of Russia, China and
Middle East countries will help support the rally in Gold prices.
Mine production will not be able to meet current demand due to lack of new
Discoveries.
The long term average in the Crude/Gold ratio has been around 16 times, but is
Currently only around 10 times.
In the remaining part of this report we will consider the major factors that are likely to
drive Gold prices higher in the near future.
Objective of the project

The objective of my project is:
23
To study the current investment scenario

To analyze the different options available for investment options
To overview the different ways of investment in gold
To acquaint the investor with the factors that affects the investment scenario in gold.
To have the extensive overview on the working system of UNICON COMMODITY
SECTION.
To analyze the different factors which affect the gold market and suggest the investors
about the right time to invest in gold.

Also see that is it the right time to invest in gold or not.
Scope of the study

The analysis of the factors which affect the prices of gold and the investment decisions in gold. A
comparative analysis of these factors has been done on the various parameters like Standard
Deviation, Regression; correlation to make possible the tedious task of analysis of these factors.
Further analyzing the factors will suggest the investors that whether it will be profitable for the
investors to invest in gold or not.
Methodology
The history and the company profile are basically searched either from the internet or by
the literature review of the company. This means that it is basically based on the
secondary source. Also the topic related concepts are done on the basis of the secondary
sources.
24
The data for the analysis is taken either by the consulting the companys employees or
from the net. So it is partially primary and partially secondary.
The analysis part is done with the help of Microsoft EXCEL by computing the required
output.
Finally the conclusions and recommendations has been written on the self finding
basis.
Literature Review:
Robert Preachter historical report on Gold and silver has been studied
Sites like uniconindia@co.in, mcxindia.in, gold research.org, etc has been studied.
The literature review of the commodity section of Unicon.
Annual report published by RBI & World Gold Council
Basic Descriptive terms:
25
Investment:
The money you earn is partly spent and the rest saved for meeting future Expenses. Instead of
keeping the savings idle, you may like to use savings in Order to get return on it in the future.
This is called Investment.
Reasons for investment:

One needs to invest to:
Earn return on your idle resources
Generate a specified sum of money for a specific goal in life
Make a provision for an uncertain future
It is also to meet the cost of Inflation. Inflation is the rate at which the cost of living increases.
The cost of living is simply what it costs to buy the goods and services you need to live. Inflation
causes money to lose value because it will not buy the same amount of a good or a service in the
future, as it does now or did in the past. This is why it is important to consider inflation as a
factor in any long-term investment strategy. The aim of investments should be to provide a return
above the inflation rate to ensure that the investment does not decrease in value.
Right time for investment:

The sooner one starts investing the better. By investing early we allow our Investments more
time to grow, whereby the concept of compounding increases your income, by accumulating the
principal and the interest or dividend earned on it, year after year. The three golden rules for all
investors are:
Invest early
Invest regularly
Invest for long term and not short term
Various options available for investment:-
26
One may invest in:
Physical assets like real estate, gold/jewellery, commodities etc.
Financial assets such as fixed deposits with banks, small saving instruments with post
offices, insurance/provident/pension fund etc. or securities market related instruments
like shares, bonds, debentures etc.
Short-term financial options available for investment:

Savings Bank Account is often the first banking product people use, which offers low interest
(4%-5% p.a.), making them only marginally better than fixed deposits.
Money Market or Liquid Funds are a specialized form of mutual funds that invest in extremely
short-term fixed income instruments and thereby provide easy liquidity. Unlike most mutual
funds, money market funds are primarily oriented towards protecting your capital and then, aim
to maximize returns. Money market funds usually yield better returns than savings accounts, but
lower than bank fixed deposits.
Fixed Deposits with Banks are also referred to as term deposits and minimum investment
period for bank FD is 30 days. Fixed Deposits with banks are for investors with low risk
appetite, and may be considered 6-12 months investment period as normally interest less than 6
months bank FDs is likely to be lower than money market returns
*Long-term financial options available for investment:
Post Office Savings: Post Office Monthly Income Scheme is a low risk saving instrument,
which can be availed through any post office. It provides an interest rate of 8% per annum, which
is paid monthly. Minimum amount, which can be invested, is Rs. 1,000/- and additional
investment in multiples of 1,000/-. Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6,
00,000/- (if held jointly) during a year. It has a maturity period of 6 years. Premature Withdrawal
27
is permitted if deposit is more than one year old. A Deduction of 5% is levied from the principal
amount if withdrawn
prematurely.
Public Provident Fund: A long-term savings instrument with a maturity of 15 years and interest
payable at 8% per annum compounded annually. A PPF account can be opened through a
nationalized bank at anytime during the year and is open all through the year for depositing
money. Tax benefits can be availed for the amount invested and interest accrued is tax-free. A
withdrawal is permissible every year from the seventh financial year of the date of opening of the
account and the amount of withdrawal will be limited to 50% of the balance at credit at the end
of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of
the preceding year whichever is lower the amount of loan if any.
Company Fixed Deposits: These are short-term (six months) to medium-term (three to five
years) borrowings by companies at a fixed rate of interest, which is payable monthly, quarterly,
semiannually or annually. They can also be cumulative fixed deposits 10 where the entire
principal along with the interest is paid at the end of the loan period. The rate of interest varies
between 6-9% per annum for company FDs. The interest received is after deduction of taxes.
Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the
purpose of raising capital. The central or state government, corporations and similar institutions
sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest
on a specified date, called the Maturity Date.
Mutual Funds: These are funds operated by an investment company, which raises money from
the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated
set of objectives. It is a substitute for those who are unable to invest directly in equities or debt
because of resource, time or knowledge constraints. Benefits include professional money
management, buying in small amounts and diversification. Mutual fund units are issued and
redeemed by the Fund Management Company based on the fund's net asset value (NAV), which
is determined at the end of each trading session. NAV is calculated as the value of all the shares
held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are
28
usually long term investment vehicle though there some categories of mutual funds, such as
money Market mutual funds, which are short-term instruments.
History of Gold:
29
Gold was first discovered as shining, yellow nuggets. Gold became a part of every human
culture. Its brilliance, natural beauty, and luster, and its great malleability and resistance to
tarnish made it enjoyable to work and play with.
Gold is the easiest of the metals to work. It occurs in a virtually pure
and workable state, whereas most other metals tend to be found in ore-bodies that pose
some difficulty in smelting. Gold's early uses were no doubt ornamental, and its brilliance
and permanence (it neither corrodes nor tarnishes) linked it to deities and royalty in early
civilizations
Gold as Money:
Gold, measured out, became money. Gold's beauty, scarcity, unique density (no other metal
outside the platinum group is as heavy), and the ease by which it could be melted, formed, and
measured made it a natural trading medium. Gold gave rise to the concept of money itself:
portable, private, and permanent. Gold (and silver) in standardized coins came to replace barter
arrangements, and made trade in the Classic period much easier.
Gold was money in ancient Greece. The Greeks mined for gold throughout the Mediterranean
and Middle East regions by 550 B.C., and both Plato and Aristotle wrote about gold and had
theories about its origins. Gold was associated with water (logical, since most of it was found in
streams), and it was supposed that gold was a particularly dense combination of water and
sunlight.Their science may have been primitive, but the Greeks learned much about the
practicalities of gold mining. By the time of the death of Alexander of Macedon (323 B.C.), the
Greeks had mined gold from the Pillars of Hercules (Gibraltar) all the way eastward to Asia
Minor and Egypt, and we find traces of their placer mines today. Some of the mines were owned
30
by the state, some were worked privately with a royalty paid to the state. Also, nomads such as
the Scythians and Cimmerians worked placer mines all over the region. The surviving Greek
gold coinage and Scythian jewelry both show superb artistry.
The Roman Empire furthered the quest for gold. The Romans mined gold
extensively throughout their empire, and advanced the science of gold-mining considerably.
They diverted streams of water to mine hydraulically, and built sluices and the first 'long toms.'
They mined underground, also, and introduced water-wheels and the 'roasting' of gold-bearing
ores to separate the gold from rock. They were able to more efficiently exploit old mine-sites,
and of course their chief laborers were prisoners of war, slaves, and convicts.
A monetary standard made the world economy possible. The concept of money,
(i.e., gold and silver in standard weight and fineness coins) allowed the World's economies to
expand and prosper. During the Classic period of Greek and Roman rule in the western world,
gold and silver both flowed to India for spices, and to China for silk. At the height of the Empire
(A.D. 98-160), Roman gold and silver coins reigned from Britain to North Africa and Egypt.
Money had been invented. Its name was gold.
Ways of investment in gold:

31
Coins and small bars
Bullion coins and small bars offer private investors an attractive way of investing in relatively
small amounts of gold. In many countries - including the whole of the European Union - gold
purchased for investment purposes is exempt from Value Added Tax.
Bullion coins
These coins are legal tender in their country of issue for their face value, rather than for their
gold content. For investment purposes, the market value of bullion coins is determined by the
value of their fine gold content, plus a premium or mark-up that varies between coins and
dealers. The premium tends to be higher for smaller denominations. It is important not to confuse
bullion coins with commemorative or numismatic coins, whose value depends on their rarity,
design and finish rather than on their fine gold content.
Small gold bars
Gold bars can be bought in a variety of weights and sizes, ranging from as little as one gram to
400 troy ounces (the size of the internationally traded London Good Delivery bar). Small bars
32
are defined as those weighing 1000g or less. According to industry specialists Gold Bars
Worldwide, there are 94 accredited bar manufacturers and brands in 26 countries, producing a
total of more than 400 types of standard gold bars between them. They normally contain a
minimum of 99.5% fine gold. The Gold Bars Worldwide website provides a wealth of additional
information regarding the international gold bar market.
Gold-backed securities:
Gold is traded in the form of securities on stock exchanges in Australia, France, Hong Kong,
Japan, Mexico, Singapore, South Africa, Switzerland, Turkey, the United Kingdom and the
United States. By design, these forms of securitized gold investment, all regulated financial
products, are generally referred to as Exchange Traded Commodities or Exchange Traded Funds
(ETFs), and are expected to track the gold price almost perfectly. Unlike derivative products, the
securities are 100% backed by physical gold held mainly in allocated form.
Gold futures
Gold futures contracts are firm commitments to make or take delivery of a specified quantity and
purity of gold on a prescribed date at an agreed price. The initial margin - or cash deposit paid to
the broker - is only a fraction of the price of the gold underlying the contract. That means
investors can achieve notional ownership of a value of gold considerably greater than their initial
cash outlay. While this leverage can be the key to significant trading profits, it can also give rise
to equally significant losses in the event of an adverse movement in the gold price. Futures prices
are determined by the market's perception of what the carrying costs - including the interest cost
of borrowing gold plus insurance and storage charges - ought to be at any one time. The futures
price is usually higher than the spot price for gold. Futures contracts are traded on regulated
commodity exchanges.
33
Gold options
These give the holder the right, but not the obligation, to buy ('call' option) or sell ('put' option) a
specified quantity of gold at a predetermined price by an agreed date. The cost of such an option
depends on the current spot price of gold, the level of the pre-agreed price (the 'strike price'),
interest rates, the anticipated volatility of the gold price and the period remaining until the agreed
date. The higher the strike price, the less expensive a call option and the more expensive a put
option. Like futures contracts, buying gold options can give the holder substantial leverage.
Where the strike price is not achieved, there is no point in exercising the option and the holder'
loss is limited to the premium initially paid for the option. Like shares, both futures and options
can be traded through broker
Warrants
In the past, gold warrants were mostly related to the shares of gold mining companies. Nowadays
commonly used by leading investment banks, they give the buyer the right to buy gold at a
specific price on a specific day in the future. For this right, the buyer pays a premium. Like
futures, warrants are generally leveraged to the price of the underlying assets.
Gold Allocated account

Effectively like keeping gold in a safety deposit box, this is the most secure form of investment
in physical gold. The gold is stored in a vault owned and managed by a recognized bullion dealer
or depository. Specific bars (or coins, where appropriate), which are numbered and identified by
hallmark, weight and fineness, are allocated to each particular investor, who pays the custodian
for storage and insurance. The holder of gold in an allocated account has full ownership of the
gold in the account, and the bullion dealer or depository that owns the vault where the gold is
stored may not trade, lease or lend the bars except on the specific instructions of the account
holder.
34
Gold Unallocated account

Traditionally, one advantage of unallocated accounts has been the lack of any storage and
insurance charges, because the bank reserves the right to lease the gold out. Now that the gold
lease rate is negative in real terms, some banks have begun to introduce charges even on
unallocated accounts. Investors are exposed to the creditworthiness of the bank or dealer
providing the service in the same way as they would be with any other kind of account. As a
general rule, bullion banks do not deal in quantities under 1000 ounces - their customers are
institutional investors, private banks acting on behalf of their clients, central banks and gold
market participants wishing to buy or borrow large quantities of gold.
Gold pool accounts

There are alternatives for investors wishing to open gold accounts holding less than 1000 ounces.
Electronic currencies
There are also electronic 'currencies' available - linked to gold bullion in allocated storage which offer a simple and cost-effective way of buying and selling gold, and using it as money.
Any amount of gold can be purchased, and these currencies allow gold to be used to send online
payments worldwide.
Gold Accumulation Plans

Gold Accumulation Plans (GAPs) are similar to conventional savings plans in that they are based
on the principle of putting aside a fixed sum of money every month. GAPs is different from
ordinary savings plans is that the fixed sum is invested in gold. A fixed sum of money iswithdrawn automatically from an investor's bank account every month and is used to buy gold
every trading day in that month. The fixed monthly sums can be small, and purchases are not
subject to the premium normally charged on small bars or coins. Because small amounts of gold
are bought over a long period of time, there is less risk of investing a large sum of money at the
35
wrong time. At any time during the contract term (usually a minimum of a year), or when the
account is closed, investors can get their gold in the form of bullion bars or coins, and sometimes
even in the form of Jewellery. If they choose to sell their gold, they can also get cash.
Gold certificates
Historically, gold certificates were issued by the U.S. Treasury from the civil war until 1933.
Denominated in dollars, these certificates were used as part of the gold standard and could be
exchanged for an equal value of gold. These U.S. Treasury gold certificates have been out of
circulation for many years, and they have become collectibles. They were initially replaced by
silver certificates, and later by Federal Reserve notes.
Nowadays, gold certificates offer investors a method of holding gold without taking physical
delivery. Issued by individual banks, particularly in countries like Germany and Switzerland,
they confirm an individual's ownership while the bank holds the metal on the client's behalf. The
client thus saves on storage and personal security issues, and gains liquidity in terms of being
able to sell portions of the holdings (if need be) by simply telephoning the custodian. It runs a
certificate programme that is guaranteed by the government of Western Australia and is
distributed in a number of countries.
Gold orientated funds

A number of collective investment vehicles specialize in investing in the shares of gold mining
companies. The term "collective investment vehicles" as used here should be taken to include
mutual funds, open-ended investment companies (OEICs), closed-end funds, unit trusts, and any
similar structures. A wide range of such funds exists and they are domiciled in a number of
different countries. These funds are regulated financial products and as such it is not possible
here to provide details on any specific funds. Funds are likely to differ in their structure - some
may invest simply in the shares of gold mining companies, some may invest in companies that
mine minerals other than gold, some may invest in futures as well as mining equities and some
may invest partly in mining equities and partly in the underlying metal (s).It would be misleading
to equate investment in a gold mining equity with direct investment in gold bullion as there are
36
some significant differences. The appreciation potential of a gold mining company share depends
on market expectations of the future price of gold, the costs of mining it, the likelihood of
additional gold discoveries and several other factors. To a degree, therefore, the success of the
investment depends on the future earnings and growth potential of the company. Most gold
mining equities tend to be more volatile than the gold price. While they are subject to the same
risk factors that influence the prices of most other equities there are additional risks linked to the
mining industry in general and to individual mining companies specifically.
Structured products
The market for structured products is dominated by institutional investors - or, in the case of
forwards, by gold market professionals - because the minimum investment can be high. The
following is a general overview of what these products are like and how they work.
Forwards
Like futures, forward contracts are agreements to exchange an underlying asset - in this case,
gold - at an agreed price at some future date. They can therefore be used either to manage risk or
for speculative purposes. But there are important differences between forwards and options
traded in the over-the-counter (OTC) gold market on the one hand, and futures and options
traded on one of the exchanges on the other.
a forward contract (or OTC option) is negotiated directly between counterparties and is
therefore tailor-made, whereas futures contracts are standardized agreements that are
traded on an exchange
although forward contracts offer a greater flexibility and are private agreements, there is a
degree of counterparty risk, whereas futures contracts are guaranteed by the exchange on
which they are traded
Because futures contracts can be sold to third parties at any point before maturity, they
are more liquid than forward contracts (whose obligations cannot be transferred).
37
Gold-linked bonds and structured notes

Gold-linked bonds are available from the world's largest bullion dealers and investment banks.
Their products provide investors with some combination of:
exposure to gold price fluctuations
a yield
Principal protection.
Structured notes tend to allocate part of the sum invested to purchasing put/call options
(depending on whether the product is designed for gold bulls or bears). The balance is invested in
traditional fixed income products, such as the money market, to generate a yield. They can be
structured to provide capital protection and a varying degree of participation in any price
appreciations depending on market conditions and investor preferences.
38
DATA ANALYSIS
39
Factors affecting price of gold and their analysis.

1. Crude Oil-
The crude oil is one of the factors for inflation. As the prices of crude oil increases there is
upward pressure on inflation. In order to hedge against the inflation people invest in gold . so we
can say that there is no direct relationship between gold and crude oil prices. It will be more clear
from the following discussion.
Gold has almost always been the most-highly-sought-after universal store of wealth.
The seemingly magical yellow metal is the de facto standard by which every other form of
money and wealth in history has been measured. Empires and currencies rise and fall, but gold
stands strong, monolithic and proud, casting an enormous shadow over all of monetary history.
40
So we can say that the gold is the king of all the currencies. Where as the demand for crude oil is
in elastic. Now paper currencies loose their purchasing power with time but this doesnt happen
with the gold. So during inflationary period when other currencies loose their value more gold
can be purchased with gold due to its purchasing power stability.
So during high crude oil prices, high inflation, and decling equity
market gold can be stored to hedge the inflation.
Analysis:
Date
Gold
Crude
Date
Gold
Crude oil
oil
May-05
Jun-05
Jul-05
Aug-05
6104.576
6185.849
6173.774
6276.731
2162.145
May-
8863.392
2593.224
2448.941
2550.24
2806.07
07
Jun-07
Jul-07
Aug-
8690.265
8732.315
8829.425
2739
2988.308
2950.413
9286.778
3197.846
9671.96
10301.33
3357.95
3735.319
10247.9
3507.764
Sep-05
6574.167
2890
07
Sep-
Oct-05
Nov-05
6889.167
7174.826
2799.087
2658.758
07
Oct-07
Nov-
Dec-05
7610.6
2712.404
07
Dec-
11264.54
11857.93
3686.8
3755.872
Jan-06
Feb-06
7957.714
7998
2905.925
2737.923
07
Jan-08
Feb-
Mar-06
8246.146
2797.556
08
Mar-
12609.42
4166.343
Apr-06
May-06
8958.106
9988.8
3123.673
3212.491
08
Apr-08
May-
11792.93
12142.66
4479.091
5272.683
Jun-06
Jul-06
Aug-06
8896.447
9513.714
9572.941
3262.516
3456.657
3401.893
08
Jun-08
Jul-08
Aug-
12327.35
13005.86
11791
5726.128
5757.04
5037.213
Sep-06
9029.255
2956.86
08
Sep-
12194.02
4723.304
Oct-06
8703.302
2683.683
08
Oct-08
12715
3748.739
41
Nov-06
9167.857
2589.456
Nov-
12108.59
2846.875
Dec-06
9152.87
2776.262
08
Dec-
12865.25
2266.143
13475.67
14791.53
2075.2
1977.682
Jan-07
Feb-07
9072.782
9494.511
2412.615
2615.884
08
Jan-09
Feb-
Mar-07
9345.75
2665.638
09
Mar-
15254.53
2452.408
Apr-07
9311.894
2706.61
09
Apr-09
May-
14491.34
14559.66
2526.794
2859.558
09
42
The above sheet and diagram shows the change in gold and crude oil prices at different dates
with fixed intervals.
Hypothesis Assumed (H0) : Gold prices do not depend on crude oil prices
Alternative Hypothesis (H1):Gold prices depend on crude oil prices.
Regression Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.328567618
0.107956679
0.088977034
2329.254449
49
ANOVA
Significance
Df
Regression 1
SS
30859955.67
MS
F
F
30859955.67 5.688024 0.02116642
43
Residual
Total
47
48
254995035.6
285854991.2
Coefficients
Standard
5425426.289
T stat
p-value
Lower
Upper
99%
99%
Intercept 7170.203075 1242.765092 5.769556 5.99861E07
3833.931075
10506.47507
0.112852561
1.909585893
Error
0.898366666 0.376680305 2.384958 0.021166
variable1
Tabulated value of z- 2.56
Analysis overview:
Significant correlation with r -0.3286
Approx 11% of variation in gold prices accounted for with crude oil.
Significant linear regression with p value- 0.0212
Regression Equation- Y=0.90 X+ 7170.2031
Interpretation- Here multiple R is 0.3256 which shows that there is correlation between
predicted gold prices and Actual one but it is closer to 0 which shows that the correlation is not
significant. It can also be interpretated from the R square value which is only 0.10 which shows
insignificance correlation. By R square we can say that variation in crude oil prices accounts for
only 11% (approx) for the variation in the prices in gold.
44
Also the t value is (2.39) less than the tabulated value (2.56) which
shows that the null Hypothesis is accepted. Therefore we can say that the crude oil prices dont
affect the prices of gold significantly.
Here it is important to know that there is great impact of the current
economic scenario. We can analyze from the graph and the table that there is more correlation in
some time period. But since there is an indirect relationship, so it is not important to analyze the
time period separately.
2. US Dollar-
It is an important question that is their any correlation between gold prices and the value of US
DOLLAR. Now the answer depends upon situation and changes with change in global economic
scenario.
Now there is a inverse relationship between gold prices and US Dollar. Before 1950 US $ was
also considered as the inflation hedge. But this is not true now. So in the past we can observe the
positive correlation between gold prices and US $. But now the relation is negative. US has a
large debt (3 trillion $) and also it pays more interest than it earns. So it creates a downward
pressure on the Dollar and make it weak. This creates a inverse relation.
As a tool of hedge now gold is demanded more than the US $. When the price of
gold depreciates the investors outside US will benefited because the dollar price of the gold will
45
increase. Investor can shift away from the dollar denominated assets to gold. Past experiences
also that gold has been used as a hedge against currency risk.
Analysis-
Date
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
Gold
6104.576
6185.849
6173.774
6276.731
6574.167
6889.167
7174.826
7610.6
7957.714
7998
8246.146
8958.106
9988.8
8896.447
9513.714
9572.941
9029.255
8703.302
9167.857
9152.87
9072.782
9494.511
9345.75
9311.894
dollar
43.69
43.51
43.49
44.04
43.99
45.11
45.92
45.07
44.07
44.44
44.61
44.97
46.43
46.08
46.51
46.55
45.96
45.02
44.76
44.23
44.17
44.31
43.59
41.29
Date
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Gold
8863.392
8690.265
8732.315
8829.425
9286.778
9671.96
10301.33
10247.9
11264.54
11857.93
12609.42
11792.93
12142.66
12327.35
13005.86
11791
12194.02
12715
12108.59
12865.25
13475.67
14791.53
15254.53
14491.34
14559.66
46
Dollar
40.73
40.75
40.44
40.96
39.74
39.32
39.67
39.41
39.39
39.92
39.97
40.46
42.59
42.95
42.49
43.79
46.94
49.25
49.84
48.45
49.02
50.73
50.95
50.22
47.29
Hypothesis Assumed (H0): Gold Prices do not depend upon Dollar exchange rate.
Alternative Hypothesis(H1):Gold prices depend upon Dollar exchange rate.
47
Regression
Statistics
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.360509804
0.129967319
0.111455985
2300.338479
49
Df
SS
MS
Significance F
Regression
37151806.78
37151806.78
7.020959231
0.010939488
Residual
47
248703184.5
5291557.116
Total
48
285854991.2
Coefficients
Standard
T stat
p-value
Error
Lower
Upper
99%
99%
Intercept
-2085.412012
4582.615959
-0.455070211
0.651153944
-14387.69939
10216.87537
273.8503496
103.351093
2.649709273
0.651153944
-3.601406983
551.3021061
variable1
Tabulated value of z- 2.56
Analytical Overview:

Change in US $ exchange rate accounts only 13% for the change in gold prices.
48

Regression Equation- Y=273.85 X-2085.412
Interpretation:Here the value of multiple R value which is 0.36, shows that the correlation
between the US $ and Gold prices is insignificant. This shows that in the current scenario the US
$ exchange rate doesnt affect the gold prices significantly. This is because R value is less than
0.5 and more closer to 0. Also the value of R square is 0.13 which shows the extent at which
Fluctuation in US $ affects Gold prices.
But from t value which is more than the tabulated value (hypothesis is accepted) we can
predict that there is a relation between US $ and gold prices. The ve intercept of t value as well
as ve intercept of regression equation shows the inverse relation between the US$ and gold
prices.
Also for time period May 05 to Oct 06 there is high correlation (0.82) & t value is 5.8 which
makes the hypothesis to be accepted. This tells that due to the change in the global economic
scenario the effect of US $ on gold prices is decreasing.
Now by doing the regression analysis for year 08 to 09 (value of
multiple R=.71 , t value=3.98) we can also predict that the there is improvement in the scenario
and again the correlation is being establishing. So there is great impact of the current economic
scenario.
3. REPO RATE:
Repo Rate is that rate at which the commercial banks borrow money from the RBI. It is a good
measure to control inflation. When the repo rate will be high, the borrowing from the banks will be
low which will actually reduce the purchasing power of the public. This will reduce the investment in
gold and it will ultimately reduce the price the gold.
Analysis:
49
Repo
Date
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Gold
6104.576
6185.849
6173.774
6276.731
6574.167
6889.167
7174.826
7610.6
7957.714
7998
8246.146
8958.106
9988.8
8896.447
9513.714
9572.941
9029.255
8703.302
9167.857
9152.87
9072.782
9494.511
9345.75
9311.894
8863.392
rate
6
6
6
6
6
6.25
6.25
6.25
6.5
6.5
6.5
6.5
6.5
6.75
7
7
7
7
7.25
7.25
7.25
7.5
7.5
7.75
7.75
Repo
Date
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Gold
8690.265
8732.315
8829.425
9286.778
9671.96
10301.33
10247.9
11264.54
11857.93
12609.42
11792.93
12142.66
12327.35
13005.86
11791
12194.02
12715
12108.59
12865.25
13475.67
14791.53
15254.53
14491.34
14559.66
50
rate
7.75
7.75
7.75
7.75
7.75
7.75
7.75
7.75
7.75
7.75
7.75
7.75
8.5
9
9
9
6.5
6.5
6.5
6.5
5.75
5
4.75
4.75
43
Hypothesis Assumed:(H0)- The Repo rate doesnt affect the gold prices.
Alternate Hypothesis (H1)- The Repo rate affect the gold prices.
51
*NOTE- By analyzing the graph and table we can observe that there are three time periods.
One that is there is continuous increase in the gold prices with the increase in time period
2nd is that period in which there is increase in gold prices but there is no change in repo rate.
Last is that period in which there is decrease in repo rate but increase in gold prices.
So it will be better that we will show the regression analysis separately
in three different parts.
Regression Analysis for the whole period:

Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.044010528
0.001936927
-0.019298458
2463.785839
49
ANOVA
Df
1
47
48
Regression
Residual
Total
SS
553680.1381
285301311.1
285854991.2
MS
553680.138
6070240.66
F
0.091212222
Significance F
0.763974109
Standard
Intercept
X Variable
1
Coefficients
9270.172641
Error
2527.017003
T Stat
3.668425115
P-value
0.000621127
Lower 99.0%
2486.254969
Upper 99.0%
16054.09031
107.96492
357.4836224
0.302013612
0.763974109
-851.7197437
1067.649584
Regression Analysis for the period of May 05 to Sep 09:

Multiple R
R Square
Adjusted R
0.85704807
0.734531395
Square
Standard Error
Observations
0.727724508
982.2792188
41
52
ANOVA
Regression
Residual
Total
df
1
39
40
SS
104119413.9
37630026.09
141749440
MS
104119413.9
964872.4638
F
107.9100273
Significance F
8.6124E-13
Standard
Intercept
X Variable 1
Upper
Coefficients
-
Error
t Stat
-
P-value
Lower 99.0%
-
99.0%
4542.661702
1911.568612
1340.687899
184.0174421
3.388306633
10.38797513
0.001619293
8.6124E-13
8173.128133
1413.265356
-912.195
2409.872
Regression Analysis for the period of Oct 08 to may 09 :
Multiple R
R Square
Adjusted R
0.838340857
0.702815392
Square
Standard Error
Observations
0.653284624
673.8858348
8
ANOVA
Significance
Regression
Residual
Total
Df
1
6
7
SS
6443752.59
2724732.71
9168485.3
MS
6443752.587
454122.1183
53
F
14.18947091
F
0.009322706
Standard
Upper
Intercept
Coefficients
20477.82008
-
Error
1793.258299
t Stat
11.41933658
-
P-value
2.70487E-05
Lower 99.0%
13829.44402
99.0%
27126.19615
X Variable 1
1158.075451
307.4353158
3.766891412
0.009322706
-2297.869755
-18.2811466
Interpretation:
Now here we have divided the regression analysis in three parts. The overview of the 1st part, 2 nd part
and the 3rd part are as below:
1. Significant correlation with r -0.044010528

Change in repo rate accounts 2 % for the change in gold prices.
Regression Equation- Y= 107.96492X+9270.172641
2. Significant correlation with r 0.85704807

Change in Repo rate accounts for the change73% in gold prices.
Significant linear regression with p value- (Approx) 0.00
Regression Equation- Y= 1911.568612X-4542.661702
3. Significant correlation with r -0.838340857

Change in repo rate accounts 70 % for the change in gold prices.
Regression Equation- Y= -1158.075451X+20477.82008
54
Now the three cases are contradicting to each other. Case 1 shows the poor correlation where as
case 2 & 3 shows the stronger correlation. Also the t-value and p-value shows that the hypothesis
should be accepted (case 2 & 3) but according to case 1 the hypothesis should be rejected.
Therefore, the question is why here such contradiction arises. The answer could be found by
observing the graphs of this section. We can easily observe that in the period (which relates
to the 2nd case-sep-08 to oct-08) there is a sharp downfall in the repo rate which is affect of
crisis in the economy and inflation rate downfall in this period.
So we can say that there is a high correlation between repo rate and gold prices, being other
economic factors constant. By generalizing the case 2 and 3 where multiple R values are .86
and .84 we can say that the there is significant correlation between gold prices and repo rate.
Also the t-values are 10.38 and -3.76 which shows the acceptance of hypothesis. ve sign only
shows the inverse correlation within that period.
4. Inflation RateGold has always been considered a good hedge against inflation. Rising inflation rates typically
appreciates gold prices. Traditional theory implies that the relative price of consumer goods and
of such real assets as land and gold should not be permanently affected by the rate of inflation. A
change in the general rate of inflation should, in equilibrium, cause an equal change in the rate of
inflation for each asset price The experience of the past decade has been very different from the
predictions of this theory: the prices of land, gold, and other such stores of value have increased
by substantially more than the general price level. The present paper presents a simple theoretical
model that explains the positive relation between the rate of inflation and the relative price of
such real assets. More specifically, in an economy with an income tax, an increase in the
expected rate of inflation causes an immediate increase in the relative price of such 'store of
value' real assets. The behavior of real asset prices discussed in this paper is thus a further
example of the non-neutral response of capital markets to inflation in an economy with income
taxes.
55
* NOTE: While calculating the price of gold there are two inflation rates. One is Gold internal
inflation rate, which is change in its production from its mines. Other is monetary inflation. The
price of gold over the medium to long term is determined by its inflation rate relative to that of
the currency you want to measure it with. With most fiat currency inflation rates, running
substantially higher than gold's inflation rate it is easy to see why the gold price will continue to
increase over time, and why it has consistently increased over time. This is not about to change
regardless of short-term volatility.
Analysis:
inflation
Date
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
Gold
6104.576
6185.849
6173.774
6276.731
6574.167
6889.167
7174.826
7610.6
7957.714
7998
8246.146
8958.106
9988.8
8896.447
9513.714
9572.941
9029.255
8703.302
9167.857
9152.87
9072.782
9494.511
9345.75
9311.894
rate
5.2
4.14
3.84
3.01
3.75
4.75
4.54
4.4
4.3
4.34
3.96
3.59
4.68
4.84
4.67
5.01
5.16
5.09
5.3
5.58
6.58
6.1
5.74
5.66
Inflation
Date
May-07
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
56
Gold
8863.392
8690.265
8732.315
8829.425
9286.778
9671.96
10301.33
10247.9
11264.54
11857.93
12609.42
11792.93
12142.66
12327.35
13005.86
11791
12194.02
12715
12108.59
12865.25
13475.67
14791.53
15254.53
14491.34
14559.66
rate
5.27
4.03
4.41
3.94
3.23
3.07
3.21
3.45
4.11
5.02
7.41
7.61
8.75
11.89
12.01
12.1
11.8
10.72
8
5.91
4.39
2.43
0.26
0.7
0.13
Hypothesis Assumed :(H0)- The Repo rate doesnt affect the gold prices.
Alternate Hypothesis (H1)- The Repo rate affect the gold prices.
57
Regression Analysis:
Multiple R
R Square
Adjusted R Square
Standard Error
Observations
0.893479
0.798305
0.779969
554.9848
49
ANOVA
Regression
Residual
Total
Intercept
Df
1
48
49
Significance
SS
MS
F
F
7168366.408 7168366.408 1.20893215 0.277143878
278686624.8 5929502.656
285854991.2
Coefficient
s
9286.05485
3
Standard
Error
757.506159
4
X Variable 139.943407 127.277454

1
6
4
Lower
99.0%
7252.48744
4
1.09951450 0.27714387 201.739996
8
8
6
t Stat
P-value
12.2587186
1
0.00
Change in INFLATION Rate accounts only 80% for the change in gold prices.
Regression Equation- Y=139.943 X+9286.05
58
Upper
99.0%
11319.622
3
481.62681
2
Interpretation:
The value of multiple R shows that (0.89) shows that there is significant relation between gold
prices and inflation rate. It verifies what ever our studies are until now that is the gold is an
inflation hedge. This analysis also shows that change in inflation rate accounts 80% for the
variation in gold prices but this movement is in reverse direction. In addition, it should be noted
that increase in inflation rate accounts for increase in investment in gold, as it is an inflation
hedge.
Also from the t-value we can see that the hypothesis can be
rejected. This means that our assumption was wrong. (T-value is 1.099 which is less than
tabulated value 2.56). Also from the graph we can observe that in the initial period the variation
from the trend line is less in later period (from May 08 to May 09).Also in the later period the
gap between gold prices and inflation rate becomes larger which shows the inverse movement
between them.
Now actually what happens is, when there is increase in inflation rate, generally the RBI
increases the CRR and Repo rate and the securities are demanded more. Gold is one of them
universally accepted within the accepted within the banking industry. Therefore the demand
increases as well as prices also.
5. Bank FailuresWhen dollars were fully convertible into gold, both were regarded as money. However, most
people preferred to carry around paper banknotes rather than the somewhat heavier and less
divisible gold coins. If people feared their bank would fail, a bank run might have been the
result. This is what happened in the USA during the great depression of the 1930s, imposing a
national emergency and to outlaw the ownership of gold by US citizens.
59
Source: RBI Site
This means that gold and bank failure are inversely related. Bank failure will affect inversely the
investment in gold but the relation is not visa-versa absolutely.
6. Stock marketThe performance of gold bullion is often compared to stocks. They are fundamentally different
asset classes. Gold is regarded by some as a store of value (without growth) whereas stocks are
regarded as a return on value (i.e. growth due to anticipated real price increase plus dividends).
Stocks and bonds perform best in a stable political climate with strong property rights and little
turmoil.
As the crude oil becomes cheap, the inflation rate goes down. (As on 6th June 2009). We have
discussed earlier that how inflation rate is on the base of the gold prices. Similarly the lower
inflation rate or the situation of deflation makes the stock market down. It tends to lower return
from the stock market. At this time investment pattern moves towards the gold market. Now the
return from both these sources is of long terms. Investment decision partly on, or solely on,
technically analysis.
60
Analysis:
Date
May-05
Jun-05
Jul-05
Aug-05
Sep-05
Oct-05
Nov-05
Dec-05
Jan-06
Feb-06
Mar-06
Apr-06
May-06
Jun-06
Jul-06
Aug-06
Sep-06
Oct-06
Nov-06
Dec-06
Jan-07
Feb-07
Mar-07
Apr-07
May-07
Gold
6104.576
6185.849
6173.774
6276.731
6574.167
6889.167
7174.826
7610.6
7957.714
7998
8246.146
8958.106
9988.8
8896.447
9513.714
9572.941
9029.255
8703.302
9167.857
9152.87
9072.782
9494.511
9345.75
9311.894
8863.392
Sensex
6,715.11
7193.85
7635.42
7805.43
8634.48
7892.32
8788.81
9397.93
9919.89
10370.24
11279.96
12042.56
10398.61
10609.25
10743.88
11699.05
12454.42
12961.9
13696.31
13786.91
14092.92
12938.09
13072.1
13872.37
14544.46
Date
Jun-07
Jul-07
Aug-07
Sep-07
Oct-07
Nov-07
Dec-07
Jan-08
Feb-08
Mar-08
Apr-08
May-08
Jun-08
Jul-08
Aug-08
Sep-08
Oct-08
Nov-08
Dec-08
Jan-09
Feb-09
Mar-09
Apr-09
May-09
Gold
8690.265
8732.315
8829.425
9286.778
9671.96
10301.33
10247.9
11264.54
11857.93
12609.42
11792.93
12142.66
12327.35
13005.86
11791
12194.02
12715
12108.59
12865.25
13475.67
14791.53
15254.53
14491.34
14559.66
61
Sensex
14650.51
15550.99
15318.6
17291.1
19837.99
19363.19
20286.99
17648.71
17578.72
15644.44
17287.31
16415.57
13461.6
14355.75
14564.53
12860.43
9788.06
9092.72
9647.31
9424.24
8891.61
9708.5
11403.25
14625.25
62
Hypothesis Assumed (H0): Sensex values and Gold prices are not sufficiently co-related.
Alternative Hypothesis (H1): Sensex value and Gold Prices are sufficiently co-related.
Regression Analysis:
Multiple R
0.671901
R Square
0.451451
Adjusted
R
Square
0.396596
Standard
Error
421.0839
Observations
49
ANOVA
Df
Regression 1
Residual
48
Total
49
Coefficient
s
Intercep 7127.15453
t
8
X
Variable 0.13794436
1
3
SS
MS
F
Significance F
1459260.49 1459260.49 8.229918344 0.01670353
1773116.608 177311.6608
3232377.099
Standard
Error
774.224815
5
t Stat
9.20553616
3
P-value
0.04808462
1
2.86878342
6
0.0167035
3
0.0000
Lower
99.0%
4673.42498
8
0.01444891
1
Change in INFLATION Rate accounts 46% for the change in gold prices.
Regression Equation- Y=0.1379 X-7127.154538
63
Upper 99.0%
9580.884087
0.290337637
Interpretation:
The relation between the gold and stock market can be clearly interpretated from the analytical
calculation from the data. The t-value, p-value, multiple R & R square values clearly shows the
picture. Here the t- value is 2.86 which is greater than tabulated value 2.56. This means that our
hypothesis is wrong. There is significant correlation between gold prices and Sensex value. Also
the Multiple R is 67% which shows the significancy of relation between the two factors. The pvalue is also very less.
From the graph-2 we can observe the trend in the fluctuation in the Sensex value. We can
observe that now the market is recovering. The graph-1 shows the correlation. In the period after
apr-08 the correlation is less which is due to the crisis effect.
7. The Gold Anti Trust Committee:

The Gold Anti-Trust Action Committee was organized in January 1999 as a Delaware
corporation to advocate and undertake litigation against illegal collusion to control the price and
supply of certain financial securities, particularly securities involving gold. The committee arose
from essays by Bill Murphy, a financial commentator, and by Chris Powell, a newspaper editor
in Connecticut, published at Murphy's Internet site. Murphy's essays reported evidence of
collusion among financial institutions to control the price of gold. Powell, whose newspaper had
been involved in antitrust litigation, replied with an essay proposing that gold interests should act
on Murphy's essays by bringing suit against the financial institutions involved in the collusion
against gold. The response to these essays from gold interests throughout the world was so
favorable that the committee was formed. Murphy is chairman and Powell is secretary/treasurer.
GATA seeks to disclose and publicize the huge speculative short positions in gold taken by
financial institutions and bullion banks. GATA believes that 10,000 tons of gold or more have
been sold short by these speculators, even as yearly mine supply of gold is only about 2,500 tons.
When we are able to show how the gap between gold demand and mine supply is being filled
largely by dishoarding of central bank gold reserves, investors may buy gold in quantity,
knowing the supply gap is too large to close without causing a substantial rise in the price of
gold. Then the gold price suppression scheme will be over.
64
8. Low
or negative real interest rates:
If the return on bonds, equities and real estate is not adequately compensating for risk and
inflation then the demand for gold and other alternative investments such as commodities
increases. An example of this is the period of STAGFLATION that occurred during the 1970s
and which led to an economic bubble forming in precious metals.
*STAGFLATION is a situation when inflation and economic stagnation occurs
simultaneously.
* An economic bubble (sometimes referred to as a speculative bubble, a market bubble,
price bubble, a financial bubble, or a speculative mania) is trade in products or assets with
inflated values.
9. War, invasion, looting, crisis:

In times of national crisis, people fear that their assets may be seized and that the currency may
become worthless. They see gold as a solid asset, which will always buy food or transportation.
Thus in times of great uncertainty, particularly when war is feared, the demand for gold rises. So
price also rises.
65
10. Demand & Supply:
Demand and Supply factor is very important for the price analysis of Gold. The demand supply
dynamics play an important role in determining the price of Gold. For a long time Gold prices
have been suppressed as a result of concerted selling by Central Banks of various countries.
However this trend has reversed, with Central Banks, especially those of Russia and China
becoming net importers of Gold. The demand for Gold is primarily driven by three factors:
Jewellery
Industrial Uses
Investment
As a result of the huge spike in Gold prices, Jewellery demand from countries like India and the
Middle East fell by 22 % in tonnage terms from a year earlier. In Asia and the Middle East,
which account for around two thirds of the Jewellery demand, consumers and the retail trade are
very sensitive to price volatility. However we believe that consumers within these markets will
continue to purchase Gold Jewellery if they are offered the right products at the right price.
66
INDUSTRIAL:
The global economy enabled electronics demand to rise strongly, causing overall industrial
demand to increase by 5 % compared to a year earlier. This form of gold demand is not price
sensitive since manufacturers of electronic goods which need electronic components, cannot
change specifications overnight. The strong growth was due to a recovery in the Japanese market
for Gold bonding wire. There was also a slight growth in the dental use of gold.
INVESTMENT:
The main propellant for the high Gold prices was the investment demand. The increase in
investment demand was due to the growing number of investors who are seeking to use Gold to
hedge against different types of risk. In countries like the US and Switzerland, the rising price
spurred interest from investors driving overall investment demand up. Moreover a recent
development has been that in India where traditionally Gold has been consumed as Jewellery,
increasing promotion of Gold bars and coins by several banks resulted in Gold being purchased
for investment purposes. However the main driver of investment demand was the investment in
Gold Exchange Traded Funds whose total off take for the first quarter was around 109 tonnes.
60
67
*SUPPLY SIDE:
While investor activity was the main driver behind the rising Gold price in the first quarter of
2006, a contraction in supply also helped. Mine production plays a vital role in determining the
price of Gold as it is the only way by which new stocks can be added to the existing above the
ground stocks. A sharp decline in mining production in the first quarter of 2006 contributed to
the high prices of gold during that period. Although Gold prices are attractive now, it will take at
least 3-4 years to get a new mine into commercial production stage. So any near term increase of
supplies can be ruled out. But, the main factor constraining supply in the first quarter of 2006
was a sharp reduction in net central bank selling which, at 116 tonnes, was 57 % lower than the
comparative period in the year 2005. This sharp decline in supply caused by the fall in central
bank sales was partly Offset by a very substantial rise in scrap supply which in the first quarter of
2006 was higher by 51 % compared to the first quarter of 2005. Huge sales by Central Banks
were the primary factor in suppressing Gold prices in the nineties. Reduction in these sales due
to the Central Banks Gold Sales Agreement will play an important role in supporting higher Gold
prices.
The demand and supply factors as outlined previously do play a role in determining Gold prices;
however they are not the most important ones. As we have outlined previously, since Gold acts
as a reserve currency to the US dollar, the factors which work negatively for the US Dollar work
positively for Gold and vice versa. These factors are outlined here in the following sections
under various categories like GDP, Trade Balance, and the like.
68
* So we can say that the gold prices are directly proportional

to the demand and inversely proportional to the supply.
Current Scenario Analysis:

The Current Scenario is analyzed in the terms of:
Crude oil Prices
US Dollar Value
Repo Rate
Inflation Rate
Real interest rates
Demand And Supply
Stock market
GDP
69
High Inflation Period To Deflation PeriodThere was the period of high inflation in the year 08.The inflation rate starts from the rare 4.11 &
lasts to 0.13 in the may 09. By observation the trend analysis Graph we can expect that now the
inflation rate is rising from the deflationary period. On 6th June 2009 the inflation rate 0.48and
the current inflation rate is -1.61 means deflation.
This deflation is due to the downward trend in the crude oil prices as it can be
observed from the graph of the crude oil. The movement of oil prices in the world markets has
brought about the setting in of some important changes. We have witnessed that the price of oil
has been slowly coming down but not before the governments of the world interfered in some
way. For starters, they realized that there were two ways to deal with the problem. Firstly to use
the OPEC meetings as a means to persuade oil producers to produce more oil in an effort to
match supply with demand for oil. The second way was to strictly monitor the oil markets to
make sure that the speculation over the price of oil does not set in hence leading to inconsistent
buying and selling frenzies These two primary steps have brought down the level of oil to where
it is today. For India the cooling of oil prices has helped the rate of inflation to slightly decrease.
Todays inflation figures show that the figures have fallen for the third week in a row. It is
however premature to say that the grip of inflation has melted away.
GDP OF INDIA:
India GDP and Standard of Living are closely related as GDP features among the significant
factors in the assessment of the standard of living. Standard of living comprises quality as well as
amount of commodities offered for consumption by the citizens and the distribution system.
The substantial growth in various sectors like IT, Real Estate, ITES has led to the
improvement of the standard of living at a constant rate. However, the statistical figures still
delineate that approximately 27.5 % of the Indian population lives below the poverty line. The
most significant indicator required to measure the standard of living is in realty per capita
purchasing power parity-adjusted gross domestic product.
70
A comparative analysis of the standard of living of India with other countries will aid in the
assessment of the position of India in the standard of living chart. The per capita- adjusted gross
domestic product of China in the year 2003 was $4,900 and that of the majority of western
European countries is $26,000 and that of the most developed country like US is $33,000. The
per capita- adjusted gross domestic product of India has been calculated to be US $ 31, 00
Measurement of India GDP and Standard of Living:
GDP makes an assessment of India's national output by dividing the current GDP of India with
the total population of the country. In the examination of overall production, GDP takes into
account both the public as well as the private consumption accompanied with the manufacture of
capital goods that consequently aid in the further production of commodities.
Current Statistics:
Industry
2008-09
Agriculture, forestry
& fishing
Manufacturing
Construction
Financing,
insurance, real estate
& business
Services
Mining & quarrying
Trade,
hotels,
transport
and
communication
Community, social &
personal services
Electricity, gas &
water supply
Q1
Q2
Q3
3.0
2.7
-2.2
09 Growth rate in %
(Estimated )
2.6%
5.6
11.4
9.3
5
9.7
9.2
-0.2
6.7
9.5
4.1%
6.5%
8.6%
4.8
11.2
3.9
10.7
5.3
6.8
4.7%
10.3%
8.5
7.7
17.3
9.3%
2.6
3.6
3.3
4.3%
Source: RBI- Hand Book of Statistics
71
Repo Rate and Other RatesThe Indian economy ushered in 2008 amidst excess liquidity related problems in the system.
Growth in money supply saw 21.2 % increase in the last week of April 2008 on y-o-y basis, it
touched 22.5% in May end and slowed to 20.7% by the end of June 2008. During Jan-May08,
With inflation and money supply growing far above RBI's target, the RBI raised the CRR by as
much as 75 basis points effective in 3 phases during April and May to control excess liquidity
and to rein in inflationary expectations. Between June and Aug 08, the RBI increased repo rate
by 125 basis points and CRR by 75 basis points to 9.0% each. The increase in capital outflows
especially from the equity markets had put significant downward pressure on the rupee value.
This in turn led to RBI intervention in the forex market through dollar sales to support the falling
value of rupee and thereby adding to the tight liquidity conditions.
Global financial woes intensified significantly in Sep 08, with the collapse of Lehman Bros and
bankruptcy of some other big financial institutions. The financial distress caused thereby was
characterized by severe credit freeze and crisis of confidence worldwide. The substantial FII
outflows from domestic stock markets coupled with tight monetary policy followed by the RBI
till Aug 08 led to significant liquidity crunch in the money market. Meanwhile, FII outflows
from equity, increased dollar demand by oil importers (due to surging oil prices) and
strengthening of dollar against other major currencies exerted significant downward pressure on
rupee value. In order to arrest further fall in rupee value, the RBI intervened in the forex market
by way of dollar sales, which in turn resulted into absorption of liquidity from the system and
added to the liquidity pressures.
*Also the real interest rates are decling or not giving the proper return.
*Current Repo Rate-4.75%
*Current CRR-5%
*Current SLR-24%
72
Trends in the Exchange Rates:

The rupee moved in the range of Rs.39.89-50.53 per US dollar during the financial year 2008-09
so far. The rupee showed a depreciating trend during the second quarter of 2008-09, which
started in the beginning of current financial year. The rupee remained around the level of Rs.43
per US dollar during third week of May 2008 to second week of August 2008, depreciated
thereafter sharply mainly on the back of widening trade deficit, capital outflows and
strengthening of US dollar.
From January to May 22nd Rupee depreciated by 7% as against the US
dollar. The Indian rupee depreciated by about 20 per cent against the US dollar in 2008 due to a
combination of factors. As the credit crisis deepened in the West, foreign money started leaving
Indian shores, which resulted in the rupee falling. Money from all across the world flowing into
US Treasury bonds in search of safety resulted in the US dollar appreciating. As a result
currencies across the world, including the Indian rupee, depreciated.
The rupee is expected to appreciate in the next fiscal and to be around
46.5/US$ by the end of FY10. On an average, rupee is expected to be around 45.90/US$ during
FY09 and 47.50/US$ during FY10. The appreciation in rupee in next fiscal (towards end) would
be on account of an expected fall in value of US dollar and resumption in the FII inflows as the
global economy begins to stabilize the latter part of FY10.
*Current exchange rate of US $- Rs.48.53
Stock market:
The stock market has badly crashed in the year 08. But it is recovering now. It is also below the
trend line. So we can say that this factor is supporter of gold investment in the current scenario.
*Current Sensex Value-14422.73
73
Supply and demand in the current scenarioGold market is undergoing radical change with investments in Europe and US taking a lead over
the traditional market Jewelry in India. While Indian Jewelry is still the worlds biggest
consumer, the market seems more diverse now. Gold ETF- GLD has become the biggest market
mover and there has been heavy demand for coins and bars. If this fundamental change in
consumer/investor choices continues, Gold could see a significant upward movement in price in
the short to medium term, and even a $1200/ounce is likely. It remains to be seen how this
change in behavior would continue after the end of this crisis (in 3-5 years). If it is a permanent
change, it is good for gold industry as it gives a far wider/diverse base and removes the
quirkiness associated with Indian marriage seasons and domestic economy.
Indian consumption is the only bright aspect in the Jewelry scene, with the Jewelry consumption
of rest of the world has gone to the toilet. This is most likely due to the fact that world recession
has not come to India so far. However, Jewelry consumption could significantly tank once the
reality sinks in and Indian market goes faces Economic straight winds.
India as-expected leads the space. It consumed nearly 21.3% of world gold in Q4 and it has
regained back its lead from the US. China, Europe and US for the next 3 big markets. Indian
Jewelry shows a significant upswing while Jewelry consumption in many other countries are
facing deep downturn most notably in Turkey, US and UK. This is partly due to the fact that
world recession has not come to India in a big way so far. But this could change and Jewelry
could be deeply hit.
Also we can observe that the demand has almost higher than the supply. The trends also show that
demand is also on the higher side in the near future.
74
FINDINGS
&
RECOMMENDATIONS
75
Findings:
a) The dollar is weak and getting weaker due to national economic policies which dont appear
to have an end.
b) Gold price appreciation makes up for lost interest, specially in a bull market.
c) Central Banks in several countries have stated their intent to increase their gold holdings
instead of selling.
d) All gold funds are in a long term up trend with bullion, most recently setting new all-time
highs.
e) The trend of commodity prices to increase is relative to gold price increases.
f) Worldwide Gold production is not matching consumption. The price will go up with demand.
g) Most Gold consumption is done in India &also its demand is increasing with their increase in
national wealth.
h) Several gold funds reached all-time highs in 2008 and are still trending upward.
i) U.S government economic policies over the past decade have systematically projected the
U.S economy down a road with uncontrollable federal spending and uncontrollably
increasing trade deficits. Both will cause the dollar to lose in international value and will
increase the price of alternative investments, specially gold.
j) With the recent devaluation of many international currencies, the U.S dollar was the
international safe haven of last resort. We can observe the signs of this ending due to many
financial factors, the most important one being a falling dollar.
76
k) There are over one trillion dollars of U.S debt owned by foreigners which could be
repatriated under certain conditions. This could cause a major decline in the value of the
dollar and a soaring gold price.
l) Gold is still low, but climbing.
Limitations of the study:

Every study suffers from some limitations which are inevitable:
The time period taken for the analysis part is only 5 years. It would have better if taken
more.
The analysis is based on the monthly data. The graph reveals more accurate picture if the
data is taken monthly or daily.
The project is maximum based on the secondary data.
We can clearly review the effect of global crisis on the analytical part.
77
Recommendations:
Now on the basis of above findings we can conclude and recommend that this is the right time to
invest in gold. Besides Bank FDs, Indian investors have a revealed preference towards Gold as a
viable investment avenue. Gold remains a favorable investment avenue in India. The Survey depicted
that 97% of the investors invested in Gold in Q4, 2008 compared to 42% in Q3, 2008. The reason
seems obvious. Gold gained an impressive 23.13% between Jan 1, 08 and Jan 9, 09. Moreover, it
gained 91.1% between Jan 1, 07 and Jan 9, 09.. The BSE Sensex and S&P Nifty fell by 32.53% and
28.31 respectively.
Hence, the reasons for Gold Fund Investing are:
Enormous Volatility in the Equity Markets.

Global Recessionary Syndrome.
Low Inflationary pressures
Depreciation of US dollar as price of gold is inversely proportional to the value of the US
dollar.
Countries keep the major chunk of their foreign exchange reserves in US dollar or Gold.
With the depreciation of dollar, countries will be compelled to keep their reserves in Gold
so as to maintain the reserves.
The sharp fall in equities prompted the investors to park their money in Gold Funds. Gold
reserves with Gold Trust, the worlds largest Gold Exchange Traded Fund (ETF) touched
780.23 metric tons on Dec, 29, 2008 up from 627.88 metric tons at the beginning of the
year.
Gold miners are the best performers in the 162 member Bloomberg World Mining Index
7The subprime crisis leads to recessionary pressures across the globe. In order to tide over the crisis,
governments are resorting to excessive borrowing. This created an adverse impact on the currency.
Investors flock to gold as a hedge against currency depreciation
78
Gold is a safe investment option in a situation of deflation. Merrill expects that the
global inflation will near to zero. In a situation of low inflation, gold can act as a store of
value as bank deposits will generate low return. With reducing inflationary pressure,
lending rate goes down. However, banks offset the low interest income by reducing
deposit rate as they have to maintain Net Interest Margin.So in my opinion this it is the
right time to invest in gold.
79
Websites References:
i.
www.rbi.org.in
ii.
www.goldresearch.org.in
iii.
www.ccilindia.com
iv.
www.investopedia.com
v.
www.wickipedia,com
vi.
www.bseindia.com
vii.
www.moneycontrol.com
viii.
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xiii.
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xiv.
www.karvy.com
80
xv.
xvi.
www.rateinflation.com
www.uniconindia.in
81

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A REPORT

SCHOOL OF MANAGEMENT SCIENCES

SCHOOL OF MANAGEMENT SCIENCES

SCHOOL OF MANAGEMENT SCIENCES

3) Introduction of the Project.

Objective of the project

Scope of the project

Basic terms of Investment

Short term & Long Term Investment Options

Ways of Investment in Gold

4) Factors Affecting Gold and Their Analysis

Gold Anti Trust Committee

Real Interest Rate

War & Other Crisis

Demand & Supply

Unicon Investment Solutions

Ownership & Capital:

Trade & Market: South East Asia.

Mission of the company:

Vision of the company:

Mr. Gajendra Nagpal-

Founder & CEO

Mr. Ram M Gupta

Co- Founder & President

Mr. Y.P. Narang

Head- Fixed Income group

Mr. Sandeep Arora

Chief Operating Officer

Mr. Vikas Mallan

Chief Financial Officer

Mr. Trinadh Kiran

National Head (E-Broking)

Mr. Subhash Nagpal -

Ms. Anjali Mukhija -

Chief Compliance Officer

Mr. Vijay Chopra

National Head (Buss.Alliances)

Mr. Anurag Nayar

Chief Technology Officer

Mr. Ashish Kukreja -

Head (Client Relations)

Ms. Deepa Mohamed -

Head (HR & Training)

SWOT ANALYSIS OF UNICON:

The Key products offering are as follows:

Banking integration with ICICI Bank, HDFC Bank, AXIS Bank.

Add any number of scrips in the market watch.

Greater exposure for trading on the margin available.

DepositoryIt offers dematerialization services as a participant in central Depository Services Ltd

Narayan Securities Pvt. Ltd

Vivek Financial Focus Ltd

Multiplex Capital Ltd

Nikunj stock Broker Ltd

O J financial services Ltd

Elite stock management Ltd

Mani stock brokers Ltd

Trans Asia securities Pvt. Ltd

INTRODUCTION OF THE PROJECT

It is durable, homogenous and divisible

In updating our price outlook, we have considered the following factors:

drive Gold prices higher in the near future.

Objective of the project

To study the current investment scenario