Swati CA

Swati_CA column in The Hindu Business Line

Monday, November 12, 2007

India’s Marshal Mackennas

The biggest strength of gold throughout history has not been that you make money by holding it, but rather you do not lose. But it looks like gold expert Timothy Green’s words need some update with gold prices surging to $823.40 an ounce, for the first time since 1980. In rupee terms, it translates to Rs 11,415 per 10 grams!

If you thought that rupee is not the only thing that has appreciated in value, think again. I was shocked to find out that on November 7, the yellow metal that has been the bane of many civilisations reached a 27-year high. I asked my aunt and she shot back with the most typical answer: “It’s festival season”. I personally don’t think that this explains the steep rise of the precious metal. As recently as 2002, when I was doing my last year of graduation, 10 grams of gold cost Rs 5,030.


  • At 3:56 PM, Anonymous KRISHNAMOORTHY said…

    Dear Swati

    • Liquidity will be “at best” and always in Gold, if you have a brave heart for high brokerages /service charges, irrespective of wherever you transact.
    • Quality of gold, for which one pays for, is always a concern as the commodity is available even at every corner of the villages as well.

    In jewellaries, about 15% is lost (for the gold part alone) when you square a buy with sell, across any period of time.
    In solid 24 c gold, most of he bankers charge about 12 to 18% over the Bombay price for retails (2 to 20 gm piece) and about 4 to 8 for higher ends( 50 gm and more)

    Gold is safe only if one buys in demat form, where brokerages are also reasonable. In this demat form, physical delivery is not available, one has to liquidate units to cash only.

    • For grandchildren, couple of value stocks may be bought in a long term bear market only and may stand better, the best being the deposits with Public Sector banks.


  • At 9:44 AM, Blogger Swati CA said…



    I'm vidhya, a CA final student from Bangalore.
    I regualarly read your articles in the Business Line paper. I am very fond of the current topics which u discuss in our day to day life.

    As u have discussed in the issue, its true that gold prices have been increasing terribly with rising stock indexes. its much because of too much of foreign investors pumping money to Indian market inspite of SEBI regulations.there is also reasons like global price increase in metals, oil and so on which influence the market. People in south are so much attached to the term gold, that apartment from an investment angle its much attractive and sentimental to buy gold on some auspicious day. they don't mind the price, its only gold that they mind to buy.

    Bangalore - 560 029

  • At 8:31 PM, Blogger Swati CA said…


    Thanks for a very thought-provoking article on gold. Though gold may not be a safe investment, the urge to buy the yellow metal is inherent.

    Your thoughts clearly show that there is a great demand for gold. One of the reasons could be that the bankers could have entered the market to tap the disposable income of youth. Public perception that gold need not be in the form of jewellery, created an opportunity for investment. The increase in the price will not slow down the consumption. Probably people are waiting for the prices to stabilise. The stock market boom has attracted more people to invest in shares. Whatever be the growth in stocks, people will always have a charm for gold because it has a mass market. We will have to admit that the purchasing power of many Indians has increased to a great extent, though many are still living in abject poverty. It is very difficult to predict the growth of the shares or gold.

    R. Thesinghrajan, Ooty


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