The Ups and Downs
The Sensex loses close to 500 points on a given day only to bounce back with a surge of 550 points the next day.
The last two months have seen the prices of gold fall to a low of Rs 28,000 per 10 gm only to cover up lost grounds and trades at Rs 33,000 in recent days.
The Indian rupee is no exception. After threatening to breach the Rs 70 against the dollar mark, it increased considerably immediately after the new RBI governor unveiled a slew of measures to support the ailing currency.
While the fall and the recovery continue to take turns, the Indian investor finds himself in a dilemma. The predicament for him is to decide which bucket to put his eggs into.
Gold Out of Reach
Traditionally, gold is considered to be a safe haven and Indians have shown their penchant for the yellow metal by investing in it during the thick and thin. This time around, the situation is different.
The falling rupee has led to a substantial increase in the price of gold, taking the yellow metal out of reach of the hoi-polloi. People who bought 10 gm of gold every year have expressed their inability to buy gold given the exorbitant prices.
"I am scared of the volatility and would prefer to invest in other instruments. Maybe, fixed deposit is a good option. Some banks in my locality have approached me with their financial instruments," said Leeladhar Rajput, a farmer from Madhya Pradesh.
Thankfully for the farming fraternity, the monsoon has been benevolent this year. The income for this segment of the society is likely to see some increase.
However, there is a bright chance that this increase in income would be diverted to some other investment vehicle say bank deposits.
Rural India accounts for three-fifth of the gold consumption in the country which is pegged at between 900 - 1000 tonne annually.
The volatility in the prices of gold has led the average Indian investor to put on his thinking cap about the investment option that will not erode his wealth.
