Himanshu Arora
Interesting observation:
1990 .....1KG gold = Maruti 800
2000......1KG gold = Esteem
2005......1KG Gold = Innova
2010......1KG Gold = Fortuner
2016.....1KG Gold = BMW X1
Keep 1 KG gold and wait till 2030....you may be
able to buy a private Jet....
(Don’t take this seriously :P)
•Gold prices tend to rise when people lack confidence in governments or
Global Crisis financial markets
•Currency values fluctuate, but gold values, in terms of what an ounce of gold
Inflation can buy, might stay more stable in the long term.
Value of the U.S. Dollar
•Bank failures and irregular economic policies make buying gold seem like a safe
Central Bank Instability haven investment.
Interest Rates • Low interest rates equate with greater attraction to gold.
• A larger money supply pushes interest rates down, which could
Quantitative Easing encourage investors to buy gold because of the lower opportunity cost.
Government Reserves • Central banks hold both gold and paper currency in reserve.
•Besides jewelry, twelve percent of gold demand is generated from industrial
Jewelry and Industry applications. Manufacturers use gold in all sorts of electronic devices, from
computers to GPS systems, and medical devices like heart stints.
•Only about 2,500 metric tons of gold get produced each year, compared to an
Gold Production estimated 165,000 metric tons in the entire world’s gold supply.
•The price is impacted by production costs, money supply, comfort or
Supply vs. Demand discomfort with financial or geopolitical stability, the demand generated by
jewelry and industry, and actions taken by central banks.
Best Ways to Invest/Trade in Gold
PHYSICAL GOLD
When it comes to investing in gold, nothing says ownership like physical gold. Fiat currency will come
and go, but gold is eternal, and gold is an excellent defensive asset that holds its value. The two best
ways to buy physical gold are gold coins and gold bars.
GOLD EXCHANGE TRADED FUNDS-(ETFs) are an excellent way to invest in gold. ETFs trade on the
stock market like an ordinary stock
GOLD MINING STOCKS- Another great way to invest in gold is with gold mining stocks.
GOLD MUTUAL FUNDS - If you want exposure to gold but don’t like the idea of investing in physical
gold, gold mutual funds might be an alternative worth considering.
GOLD OPTIONS AND FUTURES - Gold options and futures are for more sophisticated for experienced
investors. Options allow investors to speculate on the future price movement of gold, either up or
down.
Gold During Booms And Busts
Total gold reserves left
Himanshu Arora
Asset Return Diversification
Class Liquidity Volatility
Potential Benefit
Low High Very High Low
Gold
Silver Moderate High Very High Moderate
Base Metals Moderate High High Moderate
Hedge Funds High Low Moderate Very High
Arts & Collectibles High Low High High
Gold averages biggest
gains in past 20 years
Buying typically
increases with India’s
festival period, which
runs from late August
to October and is
followed by the
wedding season
Gold Silver Ratio
Gold Silver Ratio
Dow Gold Ratio
SPDR Gold Holdings
Rising ETF
holding
indicate
investors
interest rising
for ETF like
products
DX & Gold
Rising ETF
holding
indicate
investors
interest rising
for ETF like
products
Positional Trade: Interest Rates &
Gold
Rising ETF
holding
indicate
investors
interest rising
for ETF like
products
Investment in Gold
Religious
Family inheritance
Connotations
Uses Of
Gold in Status Symbol Golden Gifts
India
Indians consider gold a
super-metal, a super-
Investment metal which can provide
a solution to multiple
problems
Investing in Gold
Gold is often used as a hedge against economic and political uncertainty, and
there are a lot of factors that could send gold prices significantly higher in both
the near and long term.
FRAGILITY OF THE U.S. ECONOMY
• FUTURE OF THE U.S. DOLLAR- Gold is the ultimate investment as a hedge
against the U.S. dollar. Gold has an inverse relationship.
• OVERVALUATION OF THE STOCK MARKET -The stock market is seriously
overvalued, and nothing gets an investor’s attention like plunging stocks.
• ECONOMIC UNCERTAINTY- Gold prices move on uncertainty. Investors can
expect gold prices to soar on the heels of any number of Black Swan events.
Sovereign Gold Bond Features
-issued by RBI on behalf of GoI
Eligibility: The bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts,
Universities and Charitable institutions.
Denomination: The bonds will be denominated in units of one gram of gold and multiples thereof.
Minimum size: Minimum permissible investment will be 1 gram of gold.
Maximum limit: Maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family
(HUF) and 20 kg for trusts and similar entities notified by the government from time to time
Interest rate: The investors will be paid Interest on the amount of initial investment at the rate notified by RBI
for a particular tranche at the time of its launch and is payable semi-annually.
Tenor: The tenor of the bond will be for a period of 8 years with an exit option from 5th year onwards to be
exercised on the interest payment dates.
Redemption: Redemption price shall be fixed in Indian Rupees and the redemption price shall be based on
simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment,
published by the India Bullion and Jewelers Association Limited.
Sovereign Gold Bonds
Sovereign Gold Bond (SGB) Benefits
• Attractive Interest with asset appreciation
opportunity
Sovereign • Redemption is linked to Gold Price
• Elimination of risk and cost of storage
Gold Bond • Exempt from Capital gains tax, if held till maturity
(SGB) Sovereign Gold Bond (SGB) Features
• Tenor of 8 years with an option to exit from the 5th
year
• Holding certificate issued towards investment in
bonds
• Convenience of investing online
Gold Monetisation Scheme (GMS)
-issued by RBI
Resident Indians can deposit gold under Gold Monetization Scheme. The deposit will be
denominated in grams of gold with purity 995. The deposit will help the depositor earn
interest at the rate of interest decided by Central Government and notified by Reserve Bank
of India from time to time
Objective of RBI/Government
GMS, which modifies the existing 'Gold Deposit Scheme' (GDS) is intended to mobilize gold
held by households and institutions of the country and facilitate its use for productive
purposes, and in the long run, to reduce country's reliance on the import of gold.
Eligibility
Resident Indians (Individuals, HUF, Trusts including Mutual Funds/Exchange Traded Funds
registered under SEBI (Mutual Fund) Regulations and Companies) can make deposits under
the scheme.
Gold Monetisation Scheme (GMS)
-issued by RBI
Reasons to invest IN Gold Deposit Scheme
You get interest on idle gold - Remember your gold in the locker fetches you nothing, while you can earn
interest income on your idle gold. Under the Gold Deposit scheme, interest is calculated in Gold currency
and paid in equivalent rupees.
Tax benefits -If you have gold and jewelry up to a specified amount, you are liable to pay wealth tax.
However, there is no wealth tax, capital gains tax or income tax payable on Gold Deposit Schemes.
If prices of gold rise, you can stand to gain -When your gold deposit scheme matures, you get to redeem at
the current rates, which means if gold prices rise, you stand to gain. Add to it the interest that you would
not have got when the gold was in the locker
Loan facility You can avail of rupee loans at any branch of State Bank of India up to 75 per cent of the
notional value of gold
No locker costs and theft worries -You need not worry about locker costs to store your gold and jewelry
and also there are no worries of theft. Certificates issued are extremely safe
No upper limit- There is no upper limit on the deposit, while the minimum limit is of 500 grams.
Indian gold coin
The Indian Gold Coin is the first ever national gold coin with the Ashoka Chakra on one side and Father of the
nation, Mahatma Gandhi, on the other side. This is a government promoted and BIS hallmarked coin in India.
The coin is available in 5 grams and 10 grams along with an Indian Gold Bar of 20 grams. The Indian Gold
Coin is carrying advanced anti-counterfeit features and tamper proof packaging.
Indian Gold Coin Features
Purity
Indian Gold Coin is of 24 Carat purity and 999 fineness.
Hallmarked
All coins are hallmarked as per the BIS standards.
Security
The tamper proof packaging and advanced anti-counterfeit features on the coin makes it very safe and easily
recyclable.
Availability
This coin is distributed through designated banks & MMTC outlets.
Buy Back
MMTC also offers the transparent ‘buy back’ option for Indian Gold Coin through its own showrooms across
India.
The Indian Gold Coin is now available across 436 outlets including Andhra Bank, Federal Bank, HDFC Bank, ICICI Bank, Indian Overseas Bank, Vijaya Bank, Yes
Bank, Phulkari emporiums and MMTC centres.
Thank You
