How to make best investment in gold?

That sell-off is what created a tapering of the gold prices later on in 2008. Now to answer your question on volatility, yes gold like any other currency of commodity is volatile but that volatility depends upon macro economic factors.

Studies indicate that the volatility on gold over the last 20 years has been around 15% whereas compared to other equity indices which is hovering around the 25% mark so yes it is volatile but the volatility is lower compared to other assets.

Q: How do you weigh out a commodity like gold versus stocks? What has the traditional parameter been for gold and for equity market?

Sinha: Gold has always been a preferred investment asset for Indian investors. Whenever people feel shaky about the stock market behaviour or they feel shaky about the political scenario or any other geopolitical issues then lot of investment comes into gold. Particularly in India traditionally we have seen that so many people keep on investing gold in a usual manner on a regular basis. The reason being that gold is always considered to be a safe haven asset, it is a hedge against inflation, it is a hedge against any sudden downfall of a stock market and therefore gold is always a preferred investment asset for all the investors.