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Sunday, January 9, 2011

Investing in Precious Metals in India



Gold is the most preferred method of investment in the "Precious Metal" category in India. The availability of ETFs has added more investors who don't prefer in investing in Physical Metal. Even Silver is gaining interest among investors in India. The prices of these metals is driven by the Macro factors.

It is well known that Gold and Silver are correlated. Over the last few decades, Silver has underperformed Gold. The only difference between Gold and Silver is that Silver has its uses in the industries. As the economic recovery is expected, the price of Silver is expected to rise. However people invest in Gold to hedge against the inflation risk.

I personally invest in Gold ETFs. My additional hobby of Numismatics motivates to invest in Silver by buying Silver coins. Though, I don't intend to sell my coins, this just gives an overall satisfaction when the Silver Bullion prices move up. I bought some Silver 1 Rupee Coins of British India over the last 1 year. These coins usually have about 10 grams of Silver. They can be bought today at abt Rs 600 per coin (in case of common coins) when Silver is trading at about Rs. 44 per gram in India.

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