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Gold - Is it still a glittering investment?

Gold has a special position in our culture and society, not just for its ornamental value, but also as a store of wealth. As a result it has traditionally been a popular asset that we Indians invest our money into. The question to ask is if Gold is still a good investment option in the context of the current global financial turmoil?

In times of financial crises and geopolitical trouble, both of which the world is seeing currently, Gold becomes an even more popular investment option. Experts believe that Gold which is currently around $820/ounce, could touch up to $1,150 by summer 2009, approximately 30% return. Of course, things don't always play out the way one expects them to, and please don't treat this like an investment recommendation. But, if someone wants an alternative to FDs and debt funds, Gold might be a suitable investment option. Also, it is recommended that Gold should be 5%-10% of one's portfolio.

How can one invest in Gold? Recently, India has seen the listing of various Exchange Traded Funds (ETFs) which make it easy for investors to invest in Gold through a stock market instrument. As an investor you get a piece of paper certifying your ownership in the physical form of Gold that is held by the Fund. This is a safe and convenient way to play Gold. However, in the past few months there has been a shortage of Gold bars in the world, and there is talk of a shortage of the physical metal. The really smart money is not buying ETFs but buying the physical metal. So, if you can you might also want to consider going to your trusted jeweller or bank and getting gold coins or bars or just be old fashioned and buy jewellery!

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