6. Gold is the only metal that is yellow or
"golden." Other metals may develop a
yellowish color, but only after they have
oxidized or reacted with other
chemicals.
Nearly all the gold on Earth came from
meteorites that bombarded the planet
over 200 million years after it formed.
Gold is extremely ductile. A single ounce
of gold (about 28 grams) can be
stretched into a gold thread 5 miles long.
Gold threads can even be used in
embroidery.
Whenreferringtodiamond,
Caratreferstoweight.,i.e.onecaratweighsapprox.
0.2grams.
InGold,Caratreferstomeasurementofpurityof
Goldandnottheweight.
GoldWeightismeasuredingramsorTroyounces.
Goldhasbeendiscovered
ineverycontinenton
earthand75%ofGoldin
circulationwasmined
after2010
DidYouKnow?
In560BC,The
Lydiansproduced
thefirstGoldCoin
whichistheearliest
recordeduseofgold
asacurrency.
In1912theOlympicGoldMedals
weremadeoutof24CaratGold,in
todaysOlympicstheyarerequired
tobecoveredinjust6gramsofGold.
Inthemiddleages
drinkingmoltengold
andcrushedemeralds
wereusedasacurefor
bubonicplague.
Thelargestnuggetofgoldeverminedwascalled
the“WelcomeStranger”andwasminedin1864
inCaliforniaandproduced2.248ouncesofpure
gold.
9Carat
Goldis
actually
only
37.5%of
Gold
Theworldslargeststockpileofgoldisstored
attheFedReserveVaultsinNewYorkandit
holds25%GoldReservesinonelocation.
Goldhasmanyusesasidefromitsmonetaryandsymbolic
value.
Amongotherapplications,itisusedinelectronics,electrical
wiring,dentistry,medicine,radiationshielding,andin
coloringglass.
Goldmetalflakesmaybeeateninfoodsordrinks,althoughit
isacommonallergenforsome.
GoldgetsitsnamefromtheAnglo-Saxon
word"geolo"foryellow.ThesymbolAu
comesfromtheLatinwordforgold,
"aurum."
7. The chart ranks the best to worst performing indexes per calendar year from top to bottom Past performance may or may not be sustained in future.
Indices Used: S&P BSE Sensex Total Return Index; MCX Gold Commodity Index and CRISIL Composite Bond Fund Index
Source: Bloomberg
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
2020 YTD
April
Equity
49%
Equity
49%
Gold 26%
Equity
83%
Gold 23% Gold 32%
Equity
28%
Equity
11%
Equity
32%
Bonds 9%
Bonds
13%
Equity
30%
Gold
8%
Gold
24%
Gold
18.38%
Gold 20% Gold 16%Bonds 9%Gold 24%
Equity
19%
Bonds 7%Gold 12%Bonds 4%
Bonds
14%
Equity
-4%
Gold 11% Gold 5%
Equity
7%
Equity
16%
Bonds
3.65%
Bonds 4%Bonds 7%
Equity
-52%
Bonds 4%Bonds 5%
Equity
-24%
Bonds 9%
Gold -
5%
Gold -
8%
Gold -
7%
Equity
3%
Bonds 5%
Bonds
6%
Bonds
11%
Equity
-18.38%
Besttoworstperformingindexes
Returns
9. InvestmentinGold
Tailwinds
The 2020s expected to favour Tangible assets, especially Gold as currency debasement creates panic.
Financial and Geopolitical uncertainty - Gold provides the perfect hedge against uncertainty and Equity.
Central Banks buying Gold should remain robust also leading to spike in prices
Limited supply and small asset base ( Total estimated Gold reserves in the world are less than 200000 Tonnes)
China likely to increase / shift reserves in Gold due to increased US – China tensions.
Historically, Gold performance spikes in era of negative or low interest rates.
Headwinds
Low Economic growth will impact the industrial demand negatively.
Poor consumer sentiment, low income and high prices shall impact the Jewellery demand.
Traditionally Gold has longer market cycle with large variation in Peak to previous Peak. E.g. Gold is still to
touch the previous peak of $ 1920 touched in 2011.
10. RoleofGoldinyourPortfolio
How Much Gold Should Be in Your Portfolio?
Your portfolio should be structured in a way that helps you reach your long-term goals.
Gold should be treated like an Insurance for your portfolio. Like, when you buy a car, you take an insurance which may cost
3-5% of the cost of the car, but in case of an accident, it will reimburse your damages.
Similarly, One of the biggest reasons to include gold in your portfolio is to hedge against inflation. Some people believe
that in the event of a totally unprecedented financial meltdown, gold could provide security while other assets are
crumbling.
Secondly, Gold often moves opposite to the stock market. So, if the stock market drops, gold often heads higher. If you want
to add some balance to your portfolio, investment in Gold may provide the balance or hedge.
One rule of thumb is to limit gold to no more than 5 to 10 percent of your portfolio.
Depending on your situation and your risk tolerance, you might be more comfortable with a bigger or smaller share of gold
in your portfolio.
In the end, gold can make a fine addition to your portfolio—as long as you know why you include it, and it helps you
reach your long-term financial objectives.
11. WarrenBuffetonInvesting
inGold
“I will say this about gold.
If you took all the gold in the world, it would roughly make
a cube 67 feet on a side…
Now for that same cube of gold, it would be worth at
today’s market prices about $7 trillion dollars – that’s
probably about a third of the value of all the stocks in the
United States… For $7 trillion dollars… you could have all
the farmland in the United States, you could have about
seven Exxon Mobils, and you could have a trillion dollars
of walking-around money…
And if you offered me the choice of looking at some 67-
foot cube of gold and looking at it all day, and you know
me touching it and fondling it occasionally…
Call me crazy, but I’ll take the farmland and the Exxon
Mobils.
Interesting Economics & Observation:
1990 .....1KG gold = Maruti 800
2000......1KG gold = Maruti Esteem
2005......1KG Gold = Toyota Innova
2010......1KG Gold = Toyota Fortuner
2016.....1KG Gold = BMW X1
2020……1KG Gold = BMW 3 Series
Keep 1 KG gold & wait till 2030....you
may be able to buy a private Jet....
*****
The“WealthEffect”
ofrisinggoldpricesalone,
inIndia
isworth$266bnoverthelast12-14monthstill
Dec19
andanother$150bntillApril20.
ThisShouldprovidesolacetobeleagueredHH
balancesheetsandsupportconsumption.
OntheContrarytoBuffet
13. SovereignGoldBondBenefits
Hassle free: Ownership of gold without any physical possession (No risks and no cost of storage)
Tax treatment: The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be
provided to long term capital gains arising to any person on transfer of bond.
Tradability: Bonds will be tradable on stock exchanges within a fortnight of the issuance on a date as notified by the RBI.
Transferability: Bonds shall be transferable by execution of an Instrument of transfer in accordance with the provisions of the
Government Securities Act.
Sovereign Guarantee : Both on redemption amount and on the interest.
SovereignGoldBondFeatures
Eligibility: The bonds will be restricted for sale to resident Indian entities including individuals, HUFs, Trusts, Universities and Charitable
institutions.
Denomination: The bonds will be denominated in units of one gram of gold and multiples thereof.
Minimum size: Minimum permissible investment will be 1 gram of gold.
Maximum limit: Maximum limit of subscription shall be of 4 kg for individuals, 4 kg for Hindu Undivided Family (HUF) and 20 kg for
trusts and similar entities notified by the government from time to time
Interest rate: The investors will be paid Interest on the amount of initial investment at the rate notified by RBI for a particular tranche at
the time of its launch and is payable semi-annually.
Tenor: The tenor of the bond will be for a period of 8 years with an exit option from 5th year onwards to be exercised on the interest
payment dates.
Redemption: Redemption price shall be fixed in Indian Rupees and the redemption price shall be based on simple average of closing price
of gold of 999 purity of previous 3 business days from the date of repayment, published by the India Bullion and Jewelers Association
Limited.
Ease of Borrowing Loan : SGB can be used as collateral for loans.
14. SovereignGoldFund(SGF)
No. Tranche
Period of
Subscription
Date of
issuance
Issue
price
(Rs./Gra
m)
1
2020-21
Series I
April 20 -24, 2020 April 28,2020 4581
2
2020-21
Series II
May 11 -15,2020 May 19,2020 4540
3
2020-21
Series III
June 8 -12, 2020 June 16,2020 TBA
4
2020-21
Series IV
July 6 – 10, 2020 July 14,2020 TBA
5
2020-21
Series V
August 3 – 7, 2020
August
11,2020
TBA
6
2020-21
Series VI
August 31 – Sept 4,
2020
September 8,
2020
TBA
IssuanceCalendar
Sovereign Gold Bond Scheme 2020-21 Series II will go live on NJ E-Wealth from Monday, May 11th, 2020.
Issue Price: Rs.4,540/gram. Payment modes: Net banking & Auto Debit.
16. Call us today at
+91-98728-04694
+91-98882-20088
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