ALL THAT GLITTERS AIN'T GOLD

Gold prices of 24 carat/10 grams (1 Tola = 10 grams) have fallen from a peak price of Rs 14500 on Oct 8 to a low of Rs 11,500 on Oct 24. Again it rose Rs 12,100 on Oct 25 due to festival buying in view of Dhanteras and Diwali.
But the question asked by many persons is "Is it worth buying gold at these levels".
The answer to this is : As an aesthetic value yes , gold can be purchased at levels of around Rs 11,000 to Rs 11,500. It is unlikely in view of the falling markets worldwide coupled with rise in Dollar price gold will be able to hit a high of Rs15,000 and what most experts predicted just a month back.
In view of the festive season and the impending marriage season people will buy gold for only marriage occasion but unlikely to buy gold as a potential safety at these levels.
Caution
Remember that if you buy say 1 tola of gold at Rs 11,500 and add 80 Rs per gram as making charges then the effective price of a tola of gold would be Rs12,300 . If you wish to sell it say at a later date for Rs13,500 if prices rise then remember that the value of gold as considered by your friendly neighbourhood family jeweller is to the extent of 95% of 13500 which works out to Rs12825 so in the best case scenario you make 12825-12300=Rs525 as net gain.What happens in the worst case scenario is any ones guess.
Buy gold at levels of Rs11,000 to Rs 11,500 only if you have surplus money and don't require it for the next 2-3 years to come.
Tips
If the gold you are purchasing is not going to be used for ornamental purposes then it is advisable to invest in Gold ETF's such as UTI gold ETF or Kotak Gold ETF or Reliance Gold Exchange Traded Fund or maybe even in Gold Mutual Funds like DSP Merill Lynch World Gold Fund or AIG World Gold Fund for easy liquidity in case of crisis.
Insist on BIS (BUREAU OF INDIAN STANDARDS ) hallmarked jewellery. More details can be obtained from http://www.bis.org.in/.