Thursday 21 February 2008

Smart investors turn to Gold ETFs

Smart investors turn to Gold ETFs
Even as the market was witnessing a sharp downfall, few smart investors were found shoring up their investments by buying into Gold Exchange Traded Funds (G-ETFs). Currently four G-ETFs – Gold BeES (from Benchmark Mutual Fund), UTI Goldshare, KotakGold and RelGold (Reliance Mutual Fund) – are listed on the NSE. According to brokers, a few of the savvy investors have shifted their funds from equities to gold due to the volatility in equity markets. Gold prices i n the global markets climbed to a record high of $930.55 an ounce on Tuesday. Gold in the domestic markets surged to touch record high of Rs 12,000 per 10 gm. Analysts say gold could rise further as investors across the globe see the commodity as a hedge against inflation. Gold rose to a record $936.92 an ounce February 1 on concerns that the dollar will slump further. The precious metal tends to gain on the dollar’s weakness as many investors buy it as an alternative asset and it becomes less expensive for holders of other currencies. Gold BeES trading volume jumped by more than fourfold to 7,854 against Tuesday’s volume of 1,943, RelGold’s volume improved to 4,952 (1,758) and Goldshare to 2,130 (1,623). However, KotakGold volume dipped to 455 against Tuesday’s volume of 1,803. RelGold was the biggest gainer by two per cent, GoldShare 1.64 per cent, KotakGold 1.42 per cent and Gold BeES 1.3 per cent.

K.S. Badri Narayanan