In these times of tight liquidity, many were pleasantly surprised when Gold Major Newmont's $1.5 billion deal sailed through quite easily, indicating renewed interest in Gold Companies.
The increasing printing and supply of US Dollar will only make the Dollar depreciate further making Gold all the more attractive. Gold's limited supply, rising demand is only adding fuel to the fire. And with the Marriage Season on in India, the World's Largest consumer of Gold, Gold seems to be only on one direction, up.
GOLD FUNDS ARE A GOOD OPTION :
Instead of buying Gold Directly with its associated quality risks, you have the option of Buying Gold through Gold ETFs. Here you do not face the problem of either Storage Risk or Quality Risk as the Gold is bought and sold in Paperless Form. And moreover, it is tax efficient too.
Apart from Gold ETFs, you have the option of investing in Gold Equity Funds like AIG World Gold Fund and DSPBR World Gold fund, which invests in stocks of Gold Mining Companies worldwide. These Funds, however, tend to be more volatile compared to Gold as their fortune also depends on the Equity markets. And, as they invest overseas, they also face Currency Risk. Thus, invest in these Funds, only if you ready to ride out volatility. These Funds are for Medium Risk-Medium Return type of Investors. For others, there is always Gold ETFs like UTI Goldshare, Reliance Gold, etc.
Best of luck,
Srikanth Shankar Matrubai,
Bangalore
Also visit http://equityadvise.blogspot.com for an indepth Equity Analysis
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