SAving Money

Is it a Good Time to Buy Gold?

The government does not wants us to buy it, analysts are screaming at the top of their lungs to stay away from this precious commodity, but come Diwali and we Indians tend to head towards our family jeweler to buy a teeny-weeny piece of fortune. For Indians, there is no right or wrong time to buy gold, just 3-and-half mahurats when the yellow metal should be acquired. However, if you are a smart investor, there are few things you need to keep in mind if you plan to purchase gold this festive season -

Depreciating Rupee - The dynamics of greenback aka $ and gold are inversely proportional. In simple terms, rise in one leads to fall in the other and vice versa. Right now the USD is perched higher, so this Diwali may not be a really good time to buy gold.

Restricted Supply - Due to governmental restrictions, the supply of gold is low through regular channels. This is spurring illegal import activities. Under such circumstances, the quality of gold cannot be assured, in particular if you buy non-hallmarked gold without pakki receipt.

Solid Tip - If you have received a solid tip that gold prices are going to surge or dip in next week or month, be ready for nasty surprises. Numerous micro and macro-economic factors affect gold prices. Not to forget the indigenous cartel of gold traders who swing prices to befit them.

Long Term Perspective - If and only if you have a really long term perspective, say of 5-10 years, go for the purchase through legit channels. Gold seldom has depreciated in intrinsic value if acquired with long term perspective.

As pointed out earlier, if you are accumulating gold with long term perspective, and at regular intervals, there is no right or wrong time to purchase gold. However, it's a bad bet to make hasty investment for short term. A prudent way would be to wait till the end of the year and take a call then. Happy investing!


This article has been submitted by Vishal Ingole, who is a freelance writer.

Image Credit: Miong Flickr

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