Gold: A superb innings since 2006 comes to an end

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Indian domestic gold which was trading at Rs 8400 per 10 grams in 2006, has more then tripled in value to the current levels of Rs 27,000 per 10 grams. Very few asset classes, can give 300% returns in 7 years. Take a look at how Indian gold prices have risen since 2008. It's important to understand that Indian gold tracks international gold prices and hence international events have a bearing on Indian prices of gold.


In 2008, Indian gold was trading around the Rs 12500 levels and spurted even more as the sub prime morgtage crisis and the shocking collapse of Lehman Brothers saw gold scaling dizzy heights. Globally, investors increasingly took shelter in gold pushing international and domestic prices higher.


In 2009, Indian gold jumped even further and was around the Rs 14,500-15000 levels as globally things got worst. Poor economic growth around the globe, particularly in the US began.


In 2010, the phenomenal jump in gold continued and Indian domestic prices jumped to the Rs 18,000 levels, as gold became a safe haven bet as investors shunned other asset classes including equities and real estate which performed poorly in the previous few years.


In 2011 gold Indian gold climbed to Rs 26,000 levels as problems in Greece and the peripheral region of Europe sent international gold prices higher. Equities as an asset class continued to perform poorly, as growth rates in Europe and the US began to dwindle.


In 2012, Indian gold hit a historic peak in excess of Rs 32,000 per 10 grams, as the rupee depreciated and international prices of gold rose.

April 2013

By April 2013, international prices of gold slumped as the Dow Jones hit a historic peak and economic recovery in the US gathered steam and stimulus measures in Japan pushed equities higher. Investors dumped gold for equities on hopes of economic recovery. Indian gold slumped to the Rs 26,000 levels, the lowest level in 2 years.

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