As is customary, this Akshaya Tritiya too, I showed up at a Tanishq store to purchase the yellow metal in all its demand and glory. Very cleverly I timed my arrival at around 3pm, so I would face minimal rush. There was a huge crowd of people at the jewellery sections, but I just wanted to purchase a gold coin; no rush there.
There were just a few people, given the timing. I purchased a 10 gram gold coin of 24 karat; and it cost me 20,000+. For the past few years I have been purchasing gold coins on Akshaya Tritiya, so I went back and checked the previous bills.
In 2008, the same coin cost me 13,000+
In 2009, it cost me 16,000+ and now 20,000+
So, what does this say? Just the simple fact that gold is a great investment. Considering my 2008 purchase, the value has gone up by 50% and considering my 2009 purchase, the value has increased by 25%. So, there has been a consistent rise in prices by 25% every year.
No investment, except property and real estate, gives such high returns. If the money is locked up in FD’s or EPF’s, then too a 13,000 rupee investment would have given me 15,200 at simple interest of 8.5% and 16,000+ at compound interest of 8.5%. But 8.5% is a thing of the past, as of now 6.75% seems to be the norm for FD’s.
A friend of mine has been buying 1 gram gold every month, for the last 5 years. Instead of placing the amount in recurring deposit[RD], he buys gold. So, his 1 gram purchased in 2005 for 950/- is now worth 1950/-. Taking 1 gram for every month, in a year he bought 12 grams of gold. His investment of 11,400/- in 2005, is now worth 23,400/-. More than double!
Though gold rates too have their ups and downs, but being a precious metal its value will always be on the rise. Even if the value falls in future, the gold purchased can be used for making jewellery, all we need to pay is making charges and wastage; but not the price of gold. So, its a good investment overall. In fact, online trading has enabled trading in bullion as well. People are buying gold in their demat accounts, that seems to be the future. All that glitters is not gold, but all that is gold will always glitter.
Update 1: Its May 2011, and this year too I purchased another 10gm coin and it cost me 24000+. A jump by 20% when compared to 2010. Gold prices just keeps appreciating.
Update 2: Its Apr 2012, and this year too I purchased another 10gm coin and it cost me 30000+. A jump by 25% when compared to 2011.