Gold has always fascinated us Indians but do you know how prices of Gold have varied in India. I happen to visit RBI website which publishes lots of reports including weekly Gold prices.
So here it is 40 Years price history of Gold.
Gold Price Trend:
If you look at the trends in Gold Price below, its only after 2004-05 that gold has started giving very sharp returns. It has given more than 20% annualized return since then.
Return on Gold:
Below is the chart showing the rolling return on Gold for 1, 3 , 5 and 10 Years period. For e.g. for 5 years rolling return its assumed that you buy Gold every year and sell it after five years.
The significant point to note here is except for 10 Years rolling return gold at some point of time has given negative returns. The worst period for Gold has been 1997 – 2002 where the Gold prices remained virtually stagnant. This graph also proves that returns in Gold is not always positive which most of us assume. Its depended on market factors, currency equations and economy.
Invest in Gold?
Never think that Gold price would always rise. In fact with so much interest in Gold and so much money pouring in all of a sudden has made Gold risky investment. At this point of times its difficult to predict where would gold prices stand in next 3 -5 years!
If you are really interested in investing in Gold probably buying regularly in small chunks (SIP – Systematic Investment Plan) is the way to go.