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Gold remains a good investment bet

The yellow metal is a hedge against inflation and can be redeemed easily

Neha Pandey Deoras  |  Mumbai 

and are not the only precious commodities known to us. While has been a favourite after for some time, diamond and have also caught the fancy of individuals. This led Mumbai-based National Spot Exchange (NSE) to launch e-platinum, an investment product in in demat form under NSE’s e-series banner last year.

In the past nine months of its launch, boasts of 43,000 investors, says Anjani Sinha, managing director, Sinha goes on to call these investors 'intelligent'. The reason: “These investors want to look for scope of price appreciation beyond and at a time when we are looking forward to increased industrial demand, is going to provide better returns than other metals,” he says.

With the global economy growing at 3.4 per cent in 2013 against 3.1 per cent last year, investors should look at as an alternative asset class, says Naveen Mathur, associate director – commodities and currencies at are not understood by many and so the demand is not much. At the same time, are expensive and not available for investment. Going forward, investment experts vouch for as the best bet among precious commodities. prices are expected to stabilise in 2013 but in the long run, it is expected to do better than and

Over the past year, has given the best returns at 10.5 per cent in dollar terms, while returned 3.5 per cent and earned 1.5 per cent, according to Bloomberg data. “For a long-term investor putting money in has been more fruitful,” says Mathur. In the past three years, is up 194 per cent, gained 105.5 per cent while earned 77 per cent. Over five years, returned 166 per cent, is up 140.5 per cent and gained 44.5 per cent. In rupee terms, earned 235.5 per cent while returned 202 per cent over five years. This apart, is a good hedge against inflation. Typically, price movement is inversely proportional to equities. As a result, when equities aren't performing, becomes a fall-back option. You won't find many investment instruments for and except in the physical metal and e-series. provides plenty of avenues to invest. Apart from coins or bars, exchange-traded funds and savings funds or feeder funds from mutual fund houses and e-are also good options. The feeder fund and e-options allow you to invest through the systematic route as well.

This helps you redeem your investments when you want to, making a liquid option. Even in jewellery, you know you will get that day's price after deducting the making charges and taxes the day you want to sell. Investors can track prices but not prices. Prices vary for the same quantity/quality of Pricing policy for also depends on the jeweller's tie-up with vendors, cost of sourcing the metal, demand-supply and retailer margins, which differ with some selling at the maximum retail price and some by a price break-up. An unorganised market for physical means a tight buyback policy. You can sell jewellery only in the store you purchased it from. Additionally, is not available in smaller towns. Physical can be used to take a loan through a gold-loan scheme for immediate requirement of funds.

First Published: Wed, January 16 2013. 00:09 IST