With diwali marking the beginning of the new Indian calendar year i.e Samvat 2074, while equities are expected to give steady returns, gold and other debt instruments are likely to see an upside. The precious yellow metal has failed to recoup huge gains for customers for quite some years now and as the overly priced stock markets may see some correction.
Going ahead the precious yellow metal shall see investors open up position in it. Given the heightened interest investors has shown across equity instruments, mutual funds, IPOs the trend may continue for another quarter or so but as anticipated by experts in the long run the gold that is currently seen trading at Rs. 29500 to Rs. 30000 per 10 gm shall offer gains at par with these investment options. Also, the added advantage with this investment is the liquidity that the metal offers in the physical market.
Apart from the physical form, the paper form of gold i.e. SGBs are highly enticing given the 2.5% interest p.a. payable half-yearly as also the safety being a government-backed instrument.
Also, the increased geo-political environment shall play out good with the yellow-metal and any downsides in it are now capped.
Debt on the other hand which offers return based on economic parameter such as inflation and as the current inflationary numbers given by both CPI and WPI remain way below the RBI's estimate of 4%, the RBI is expected to bring about a rate cut before the current fiscal year ends. Also, other economic indicators such as the fiscal deficit can in turn also determine returns from fixed income instruments which in the Indian calendar year Samvat 2073 remained between 6.5%-9%.