Comparison of Gold ETF in India.(Part 1)
Comparison of any Gold Funds is too early and immature. As long as each individually are doing well and returns are at par with the benchmark returns.
I think in India there exists a tremendous market potential for GOLD ETF.
Indians are the largest consumers of all varieties of Gold. However, majority consumption of Gold is in form of jewelry. This is what makes it the most unique market in the world.
The prices of Gold in India does not necessary correlate with the international markets. Frenzied buying in India during the festive and marriage seasons lightens up the longest of all Gold bear cycles, if there exists any.
The Gold sold to consumers has a uniqueness of its own. Only the jeweler who had sold you the Gold may buy the Gold back in some cases. Even in such cases the rates offered by him might not be in tune with the market rates.
Other jewelers may not consider your Gold to be genuine and have plenty of false reasons for proving himself right.
Lastly banks now a days also offer genuine gold as an OTC product. I shall not be surprised if you have separate Relationship Manager assigned for Gold selling/marketing
purposes only in Bank Branches. This Gold comes at a premium price. It is costlier than the gold provided by your local jeweler.
All this reasons are valid enough for investors to consider buying Gold ETF in India. However, since the product is recently been launched in India, even it is not without its share of pitfalls. Surely with markets maturing and more players entering with similar products will help the pie to grow bigger and more robust which will in turn help the investors in long run.
Below is the link to 3 months returns for Gold ETF’s.