As global gold prices surge, the precious metal market across the country is witnessing a slow death of 'tola’ - atleast for the small investors.
For ages, people across the country have been buying gold in tolas, but thanks to the recent surge in gold prices, the gold buying trend in the country has changed. About two years ago, when gold was available at about Rs 8,000 per 10 gram (1 tola = 11.66 grams), investors preferred buying the metal in good quantity.
“Now, as the prices have increased to Rs11,500 per 10 gram, retail gold buyers are investing a fixed amount in the metal which means the quantity or size of gold purchased is very less,” said president of Choksi Market Association of Ahmedabad, Rajnikant Chokshi. He further said investors are also moving towards other investment options which give better returns than gold. “For investors buying equity is more profitable than gold. So to some extent gold investment gets diverted to the equity market,” said Chokshi.
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Even in case of NRIs, the amount invested in gold buying is a bit higher than the previous year but, tonnage wise, gold sale is less. “In the previous year, due to chikunguniya, many NRIs didn’t visit the country. This year despite a good number of NRIs coming to India, investment in gold was limited,” said former president of the association and bullion analyst, Girish Chokshi.
The price of the yellow metal, which is believed to be a safe investment, has increased by around 90 per cent in six years.
Mumbai-based bullion analyst, Bhargav Vaiday believes that as an investment, gold should not be compared with equity or real estate.
“Gold is not an investment option but it’s a store of value,” said Vaidya. “Whatever happens, people will not stop buying gold, but quantity buying may reduce.” According to president of Gem & Jewellery Trade Council of India, Shanti Patel, gold buying will any day be economical. “Looking at the long term, the gold purchased today will always be economical. This is because price of the commodity will continue to climb in the future,” he said.
For ages, people across the country have been buying gold in tolas, but thanks to the recent surge in gold prices, the gold buying trend in the country has changed. About two years ago, when gold was available at about Rs 8,000 per 10 gram (1 tola = 11.66 grams), investors preferred buying the metal in good quantity.
“Now, as the prices have increased to Rs11,500 per 10 gram, retail gold buyers are investing a fixed amount in the metal which means the quantity or size of gold purchased is very less,” said president of Choksi Market Association of Ahmedabad, Rajnikant Chokshi. He further said investors are also moving towards other investment options which give better returns than gold. “For investors buying equity is more profitable than gold. So to some extent gold investment gets diverted to the equity market,” said Chokshi.
• Check out our Yearender Special
Even in case of NRIs, the amount invested in gold buying is a bit higher than the previous year but, tonnage wise, gold sale is less. “In the previous year, due to chikunguniya, many NRIs didn’t visit the country. This year despite a good number of NRIs coming to India, investment in gold was limited,” said former president of the association and bullion analyst, Girish Chokshi.
The price of the yellow metal, which is believed to be a safe investment, has increased by around 90 per cent in six years.
Mumbai-based bullion analyst, Bhargav Vaiday believes that as an investment, gold should not be compared with equity or real estate.
“Gold is not an investment option but it’s a store of value,” said Vaidya. “Whatever happens, people will not stop buying gold, but quantity buying may reduce.” According to president of Gem & Jewellery Trade Council of India, Shanti Patel, gold buying will any day be economical. “Looking at the long term, the gold purchased today will always be economical. This is because price of the commodity will continue to climb in the future,” he said.
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