There is an inverse relationship by theory between the markets and the price of Gold. Gold is a commodity that since time in memorial has been used to judge the level of development of a country. The gold reserves of a company actually highlight how secure a country actually is.
Some times it may happen that the price of gold and the market may increase at the same time. This is a very unlikely situation and it only happens once in a blue moon.When the market starts falling the investors look for alternate sources of investment. In a country like India where gold has always been considered as a safe and sound investment huge sums are thereby diverted towards buying gold.
Gold in the form of units can also be purchased from the MCX which is a sort of commodity market like the sensex.
Remember that however Gold purchased in the form of jewellery is not beneficial because:
Firstly, selling this sort of gold is only possible if you go back to the dealer who you actually purchased it from.
Secondly, When you actually do sell this gold around 5-10% depreciation charges are cut.
Thirdly, In most cases if a person wishes to avail loan against gold the amount allotted is much below the market value.
Thus, the best gold that a person can purchase is in the form of gold units on the MCX or pure gold in the form of Gold biscuits and Gold coins{ Though it is recommended by professionals that individuals should avoid gold coins as far as possible}
Loads of gold
Udit Sabharwal { on behalf of doodle inc}
