Gold Exchange Traded Funds

Gold Exchange Traded Funds are a way of trading Gold in stock exchanges. The advantage is, you need not store a physical gold, rather have the value in papers. Gold ETFs are also termed as paper gold. You could also buy/sell any time with out having to carry gold in physical form. Similar to Shares, you need to have a Demat Account.

Currently, there are 6 Gold ETF companies in India:

1. Gold Benchmark ETF (GOLDBEES.NS)
2. UTI Gold ETF (GOLDSHARE.NS)
3. Kotak Gold ETF (KOTAKGOLD.NS)
4. Reliance Gold ETF (RELGOLD.NS)
5. Quantum Gold ETF (QGOLDHALF.NS)
6. SBI Gold ETF (SBIGETS.NS)

One unit of GETF is about one gram of Gold, however this depends on GETF. Gold ETFs carries additional costs like entry/exit load, brokerage charges etc. One has to look for Expense Ratio while selecting GETFs. Custodian Banks appointed by the mutual fund companies takes care of safely storing the gold bought on behalf of the investors.

Srikanth Ramu

Gold Savings Schemes

If you are dampened by the high gold price but want to invest in Gold Jewelery, then gold savings schemes is for you. Gold Jewelers offer various gold savings schemes where an amount is paid monthly for a fixed period. On maturing, a bonus component is added and Gold ornaments or coins could be bought. I've listed some of the schemes offered by Gold Jewelers:

Scheme 1:

Pay Rs X every month for a period of Y months
At the end of the period, the total amount paid = X * Y
A Bonus component Rs X (one month's installment) is included
A gift article is also offered by some Jewelers

Scheme 2:

Pay Rs X every month for a period of Y months
At the end of the period, the total amount paid = X * Y
For the purchase of Jewels, additional costs like Wastage, Making charges, VAT is discounted

Scheme 3:

Every month for a period, pay for a unit of gold like 1gms or 8 gms etc
At the end of the period, a bonus component of 1 unit is offered

Normally, you would not be allowed to encash inbetween or on maturity. Also, no benefits would be offered if you close your account in between.

Srikanth Ramu

Akshya Thrithi - To buy or not to buy gold

Akshya Tritiya falls this Sunday (May 16) and I guess, there would be usual rush to buy gold. Well, on one side there is a sentimental tag attached, and on the other side, we are witnessing a tremendous rise in gold prices. In May, the rates of per gram gold in Chennai rose close to Rs:70. Sensing the trend, all the Jewelers would try to cash in this season by offering discounts. Interestingly, I stumbled upon this link about various offers.

http://www.asklaila.com/search/Chennai/-/Akshaya%20Tritiya%202010/?searchNearby=false&v=event

Srikanth Ramu

Gold Prices showing downward trend

Its good to see Gold prices dipping and touching Rs:1520. For the last 3 months (Jan 2010 - March 2010) Gold rates have fluctuated in the range of Rs: 1500 - Rs: 1600. So, if you are interested in buying gold, then you could do it in couple of days. Although, one is not sure if the rates would further be slashed, but still the current prices are good one.

For today's (26/March/2010) prices:

MJDMA - http://mjdma.com/OtherInformation/mjdmaratechart.aspx
Grt Jewellers - http://grtjewels.com/

Srikanth Ramu

December 2009 Gold prices update

Overall, gold prices witnessed a downward trend during December 2009. Although, gold rate went up during first week of December with 1 gram touching Rs: 1716 in Chennai, prices dropped subsequently with intermittent upward movement. The lowest price was in the range of Rs:1546 and ended up at 1556 on 31/Dec.

This was the case at global market as well, with per ounce gold rate oscillating between $1080 and $1160

Note: The Chennai rates specified are based on Jewelers And Diamond Merchants Association.

Srikanth Ramu

Whats in your Jewelry bills - Making Charges, Wastage...

With gold prices dropping a bit, buyers would look for Gold as a good investment option. However, buying Gold as Jewels is not a recommended one as an investment point of view when compared with Gold Coins, Bars, ETFs. This is because Gold Jewels draw additional costs in the likes of Wastage, Making charges etc and you end up losing money while venturing into short term trading. So, whats actually in your Gold Jewellery bills. Besides the gram rate, you would find Wastage charges, Making charges, Stone charges, Valued Added Tax (VAT) added to price of the Jewelry.

Wastage - While making gold jewels, some percentage of Gold is lost, hence Jewelleries charge the lost gold and it ranges between 10% to 35% based on the complexity of making the jewel. Although, the gold smith would take extra care not to loose gold, but the wastage charge is still passed on to the buyers.

Making Charge - The craftsmanship is a separate component included in the price tag

Stone Charge - Jewels with embedded stones would have the stone charge

Value Added Tax (VAT) - For gold, silver ornaments 1% of the total price is charged

Srikanth Ramu

Gold prices are dropping

There seems to be some respite for the yellow metal buyers as gold prices were cooling a bit. For the past few days, the market witnessed a downward trend in gold rates. In the internaltional market the rates for per ounce of gold dropped to $1120 (approx.) from $1160 (approx.) at the start of the week (7/Dec/2009). In Chennai market too, there is a drop of close to Rs: 80 - Rs:90 in the gold prices for 22 Ct 1gm. The current rate is at the range of Rs:1580 which was prevalant during second week November 2009.

Please note the rates mentioned here are based on MJMDA, however the prices at Jewlery marts might be slightly different.

Srikanth Ramu