Gold at 18-month low: Is now the time to buy it?
Should you buy gold?
From Rs 32,500 per 10 gm in November, gold has dipped to Rs 25,900 now — down 25% in just five months. If you have been planning to buy, this is a time to start buying, say pundits. Just remember, gold should form only 5-10% of your entire portfolio. So, don’t go overboard. Whether you want physical gold (coins, bars or jewellery) or electronic gold (exchange-traded funds), it’s a good idea to pick up small amounts at regular intervals — more so now.
Where are gold prices headed?
Prices are expected to continue falling for some more time. A key level to watch is Rs 25,000. Experts expect prices to harden around May 13 (Akshaya Tritiya).
Where else can you invest now?
Plummeting gold and crude prices should boost the economy. If the macroeconomy does improve, markets will follow suit, in which case equities will fetch good returns. However, it is better that retail investors look at investing in equities via systematic investment plans, in mutual funds.
Do debt investments make sense?
Falling gold prices = moderating inflation (at a 40-month low) = high chance for a rate cut by the RBI. If rates correct and banks pass on the benefit to you, your bank deposit rates will also come down. There are signs already. Punjab National Bank, Oriental Bank of Commerce and Bank of Baroda cut deposit rates by 25 basis points each recently.