Understanding the true value of Gold

Gold has been one of the most favorite investment option for an Indian as we are the largest consumer of Gold in the world. Besides the traditional options like purchasing  jewelry or investing in gold bars and coins, there are a plethora of new options available like the National Spot Exchange, Gold ETFs and also Gold Fund of Funds. Now, whether we purchase Gold through the physical option way or through mutual funds, it is of paramount importance to first assess what are the drivers of the price of Gold and how to value it. This article tries to examine and answer these important questions.

Investments are very difficult for most of us to theoretically understand, practically apply and emotionally stick to as to what asset allocation should we follow (stocks, bonds, real estate, commodities etc) or what time frame to adhere to and what are the risks attached to it. But there is one thing which most of us, particularly Indians, love and also believe that they understand