Tracking the markets, one must have been hearing a lot about 'taper talk'. It is a fear that interest rates around the world starting from the US are about to rise. So, is that going to bring about more market volatility as stocks have already run up so much, and therefore should investors start increasing allocation to gold? Gold has underperformed over the past 1 year, it is down 8-9 percent in dollar terms – so the question is should one think of investing in gold? Feroze Azeez of Anand Rathi Wealth Management discussed this further.
“I think it is a good time to think of gold,” said Azeez.
“There are different periods when gold should be considered in one’s portfolio not strategically for years and decades. Today would definitely be a reasonable time and I would say the probabilities of gold outperforming its counterpart from a stability standpoint, which is debt is very high, upwards of 80-90 percent that gold can outperform debt over the next three years in India,” he added.
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"If you are digitally savvy and transact online, you would have noticed that these platforms -- Paytm, Google Pay, PhonePe, Kuvera – a whole host of them – many of them are offering you the option of buying and selling what is called digital gold."
How do this work and the promises that one can buy gold for as little as Re 1, is it a physical gold purchase, where does this gold stored, does it have the RBI mandate? Vikas Singh, MD and CEO from MMTC-PAMP, answered all these questions.
“Through these platforms, whether it is Paytm or PhonePe or Google Pay, you are engaging in a transaction with MMTC-PAMP on one side and yourself as a customer on the other side and we transfer the gold either you buy or you sell it back to us or you have a third option of redeeming it. So, it is as flexible as it gets,” said Singh.
For the entire discussion, watch the accompanying video.