Gold is one of the precious metals and Precious commodity.This precious metals is treated as sacred by Indian texts.Indians buy Gold for wearing in the form of jewellery.Indians believe that wearing Gold brings fortune and luck.Indians are the biggest consumers of Gold.Foreigners buy Gold with the motto of investment.Indians buy Gold in the form of Gold coins,Gold biscuits and Gold jewellery.
Gold is malleable,that is it can be drawn flat like any metal.It is also ductile,that is it can be drawn into a wire.For making jewellery,Gold must be mixed with Copper for providing strength to the jewellery.Gold is one of the least resistant metals to corrosion.
Gold is sold in the form of 1 gram gold or 0.32 ounce.The purity of Gold is measured in the form of Karats.24 Karat Gold means 100% purity.22 Karat Gold is used to make jewellery.
Gold is obtained in raw form.It must be processed and purified.In India there is KGF(Kolar Gold Factory) in Karnataka.South Africa has one of the biggest Gold mines in Johannesburg.Gold is one of the metals or commodities that is traded in stock exchanges.
Gold is used as pacemaker in Heart, microprocessor,cell phone,hardware,jewellery,Ayurvedic medicines,PC Laptop hardware.It is treated as Fiat currency.Because it is inherently valuable commodity.It is fundamentally useful substance.
Gold is used as a hedge against inflation and currency depreciation. It is used as Proxy currency. It is a safe haven asset.
The central banks of advanced countries consume Gold mostly.USA and China have highest Gold reserves.
Until the 1970’s International trade was based on Gold.The medium of exchange in international trade is Gold.During Nixon era US Dollar became the dominant currency and mode of International trade.
India is the highest Consumer of Gold.But at present there are no Gold mines in India to meet the demand for Gold in India.KGF Gold mines are exhausted.Hence India imports Gold in a large quantity.
Gold prices are directly proportional to crude oil prices.Crude oil is required for processing of raw gold.
Investments in Gold can be made in following ways.
PHYSICAL GOLD- Investments in Gold can be done by buying Gold coins,Gold biscuits.Instead of Gold jewellery it is advisable to invest in Gold coins and Gold biscuits.It is a significant asset.It can be stored in a vault.But investor should make Gold real,pure and tested.During the time of war one can travel to other country,sell gold and start new life.
While buying Gold it is advisable to make sure it has a hallmark.Some jewellers are selling Gold with the option of buyback.
GOLD ETF- Gold is a commodity.one can invest in Gold ETF.Investor can track the price of Gold any time.He can also sell any time upon finding a suitable buyer.There are very less costs involved in the process.But for investing in Gold ETF investor should have Demat account and Trading account.
GOLD MUTUAL FUND- Investors can invest in Gold Mutual funds. They operate like any other mutual fund. They are managed by fund manager. Hence there is expense ratio. For investing in Gold Mutual funds, investor should have PAN card.
SOVEREIGN GOLD BOND- SGB’ are introduced by government of India for reducing the rush for buying Gold. Government decides the unit price of Gold .Investor can invest in Gold depending on the number of units, he wishes to buy. There is a lock in period of five years. After the maturity period of 8 years, both interest and redemption amount are credited in the bank account of investor. These bonds are issued by the government. GOLD LOANS- In Gold loans there is less documentation. No collateral security or credit history is required. Banks give 75% to 85% of the loan. These loans have short tenure and instant processing. Today most of the banks give Gold loans within 10 minutes. These
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