Right time to invest in gold?

         Right time to invest in gold?

Yes, this is the right time to invest in Gold as Gold is a good and a safe hedging commodity in uncertain times. Investors in stocks and financial markets have burnt their fingers in the recent past due to weakness of US dollar, higher inflation rate in double digits, rising petrloeum prices. So they would like to square up thir losses by going for the gold anticipating that in near future with the festival and marriage season in full swing the demand is likely to rise and prices of gold are likely to go up. The gold market in our country is highly price sensitive and as soon as prices fell in the last weak, domestic investors have rushed to gold shops and show rooms to encash this opportunity and buy gold with a view to gain in appreciation of prices in next few weeks or until the sentiment remains encouraging. Although prudence demands that we should invest a portion of our assets in gold, we should not go overboard. While there are several benefits of investing in gold, some caution points are worth noting:

1.When compared with other assets, such as debentures, gold does not provide regular income.

2. Investment in gold does not provide any tax benefits. On the other hand, sale of gold results in a tax liability.

3. Purity of the metal is always a cause for worry. There is ample chance that one might not get the purity that is promised. At the time of selling the substandard gold, one will have to settle for a lower price. To avoid this problem, at the time of buying, it is always better to insist on a certificate authenticating the purity of gold.Going for hallmarked jewellery is also recommended.

4. Extra cost is involved in preserving gold. If one has physical gold,one needs to invest in a bank locker for safe keeping. If one decides to buy gold over the stock exchange (i.e. gold exchange-traded fund), then onel needs to maintain a demat account.

In conclusion,invest in gold but prudently. 


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