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Are bullion markets safe for investors (2010)?

Created by : Archana Singh, Relationship Executive, ICICI Bank  | 03 02 2010 12:45:41 +0000
Industry : Investment BankingFunctional Area : India(Markets)
Keywords : investment. gold precious metals bullion market
Activity:  250 views;  last activity : 07 06 2010 20:18:09 +0000

The bullion reserve of a country is the indicator of the amount of wealth a country possesses. Bullion is defined as a bulk quantity of precious metals consisting of gold, silver and others that can be assessed by weight and cast as a lump. Bullion is valued by its purity and mass rather than its face value which is applicable in the case of money. India Bullion Market is a recognizable index that highlights the economic growth of the nation.

Trading of gold is known as bullion trading. India is the leading consumer and importer of gold in the world. Due to this, the potential of the India bullion market is very promising. Owing to the weak price of Dollar in the global market, the price of bullion is soaring.

So, are bullion markets safe for investments?

  
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Esha your argument is right for Investors that everyone should study the market properly before investing. But Again Archana is right for 2010 & have the point. because as per global financial crisis, i think it is better to invest in precious metals than base metals. Bullion market is still bullish these days. And if we are investing for long period we can invest. Otherwise if we are investing as a trader then use technical analysis rather than fundamentals this year. We can make proper hedging with bullion, currency and stocks this year as a trader...


By Vipin Bhasin, Private Equity/Hedge Fund/VC-Manager, Indian Investment Co.  06 29 2010 18:36:55 +0000
 
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No,I don't think it would be better to invest heavely in the bullion market. The next jewellery purchase will be a tad costlier, thanks to a 50% hike in customs duty on precious metals. But that’s not all. The proposed 2% interest subvention on pre- and post-shipment not being extended to the gems and jewellery industry will hurt the sector.

The cost of manufacturing will increase, as compared to other countries , thereby affecting exports. This effectively means there will be a 2% increase in the cost of gems and jewellery because the sector will not get any relief on the pre- and post-shipping cost. 

Thus, it is better not to invest heavely on  precious metals, rather one should study the market properly & see what price the market offers the best to trade for.
By Esha Johar, Risk Analyst, Irevna  03 02 2010 13:25:07 +0000
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Archana..........What do you mean by investment ???? Following Eash and other seems to be a traders comment but not investor.

Investor must not be a trader.

Bullion proved to be the most secured investments in last many years. Hence Investor will not loose any time in the segment. Keep invested.

 

But the trader can loose the charm any momment at these charts.....Keep safe distance till breaks.
By Jyoti CHETANI, Freelancer, Equity Research/Analytics  | 06 28 2010 16:57:34 +0000
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In my opinion, investment in bullion is a good option as well as risky. When there is risk, more chance for gain.
By Parameshwar Bhat, Company Secretary, TRMN  | 06 27 2010 17:08:35 +0000
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No, Idon't think that other then comman man are investing in gold as a investment, only for fashion either it is costlier or cheaper.Any how the common man suffer in every ways
By Rishi Nath Thakur Thakur, Finance/Budgeting Manager, Butterflies (NGO)  | 06 21 2010 05:24:04 +0000
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Yes, this year the bullion markets are going to gain new heights. When the interest rates are low we have conditions for asset bubbles to develop, and they are developing at the moment. buying at the start of the bubble is rational.

Thus, the bullion markets are safe enough for investments this year.
By Archana Singh, Relationship Executive, ICICI Bank  | 03 02 2010 12:45:41 +0000
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For the common man, definitely Esha, your conclusion -" it is better not to invest heavily on  precious metals, rather one should study the market properly & see what price the market offers the best to trade for."

But at the same time, my humble submission is , that can we generalize the notion, without understanding the need for the investment ( as hedge may be the purpose to physical stock or future requirement), horizon, psyche of investor and risk appetite?
By Prassan Kumar Sharma, AVP, Nirmal Bang Securities  | 03 05 2010 21:54:31 +0000
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I tend to agree with you Esha. I feel that investments must be carefully thought our and spread to avoid risky exposure to volatility. One must decide on three or four atleast to invest in like real estate, stocks, deposits, bullion and so on and spread his investments after familiarizing with the degree of volatility.

From what i understand Gold went in for a bad patch recently. So i would definitely adopt the policy of safe than sorry.
By RAMESH KANDADAI, Principal Consultant, ARM Consultants  | 03 03 2010 07:38:19 +0000
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