Investors
fear that after a decade long bull run, the bear run in gold may be equally
prolonged. Gupta doesn't think so. "Today markets have turned dynamic, so
you can't rely on historical patterns," she says. She believes that while
gold may decline or move sideways for a couple of years, it should do well thereafter.
Gold's production cost of $1,050-1,100 per ounce sets a floor below which it
can't decline.
What
you should do: Exiting gold at this stage when its price has come down
significantly would be a mistake. In fact, some see this as an opportunity.
According to Tanwir Alam, CEO, Fincart, "If your gold purchases are tied
to a goal, such as your daughter's marriage, then declining prices work to your
advantage." best investment plan in india But
most experts are also not very bullish about the prospects in the near term.
Stagger your purchases to gain from further declines.
Avoid
buying jewellery when you wish to invest in gold. "When you go to sell
jewellery, you will immediately lose 30 per cent of its value — about 20 per
cent to making charges and another 10-12 per cent on account of purity
issues," says Gupta. Gold ETFs are a more cost-effective option. They are
liquid and have no security or purity issues.
