For hundreds of years, gold has been a stabilizing force in the Indian economy. The recent return to less risky investment vehicles has prompted an upswing in the total value of gold on the global market. Investment in Indian gold shares has three major advantages for NRI investors:
1. High Return/Low Risk
Gold has proven itself to be a great preserver of value over the long term. If the global economy continues to be unstable, gold will be in even higher demand raising the total value. In 2009 alone, gold rose 15.5% on the global market.
India’s gold market is changing. Individual investors are showing more interest in buying gold backed investments. Investment companies are responding to this increased demand by offering special incentives for purchasing gold options.
2. The Gold Guinea
The Indian Multi-Commodity Exchange (MCX) has introduced a new futures stock based upon the 8 gm gold guinea. This is hoped to revitalize the retail market and encourage a new breed of direct gold buying and selling in India. Many individual Indian citizens have become interested in buying physical gold coins like the new guinea. New delivery channels for the gold coins have been developed, and business is expected to move briskly over the next year.
3. Spot Trading
Organizations like RiddiSiddhi Bullions Ltd are working on Spot trading platforms that will facilitate buying and selling gold in smaller denominations. Amounts as small as 1g or 2g can be easily purchased using their system. The effect of the quick buy-sell mechanisms associated with Spot trading platforms is twofold:
- Individual Indian families are more likely to invest in the smaller quantities of gold available through the system.
- Investors can utilize the platform to hedge their risks.
Spot trading and other innovations open the market to new groups of local Indian gold buyers. As the Indian gold market experiences more liquidity, external investors and non resident Indians can easily cash into one of the variety of gold-backed investment products to hit the Indian marketplace.
Bio: Alexis Bonari is a freelance writer and blog junkie. She is currently a resident blogger at First in Education, researching areas of online degree programs. In her spare time, she enjoys square-foot gardening, swimming, and avoiding her laptop.