Gold Bullion
The trading of gold is known as gold bullion. Trading of the gold bullion in Indian scenario is linked with the international prices. The only difference has been that the price is quoted per 10 grams in India whereas the price for the gold bullion is shown as per ounce in the international markets. 1 ounce or oz. =28.3495 grams.
Gold bullion trading being done at various exchanges
In India the gold bullion is traded as Gold 995 and Gold 999, the purer form of gold being Gold 999. The changes in the prices are indicated at the close of each trading day. However, the spot gold rises will continuously change and this will be reflected in the Bid and the Ask rates. The difference between the Bid and the Ask rate will be the profit that is earned by the trader. The bullion gold rate has seen massive jumps in the past month itself. In India the gold bullion rate will vary from one city to another as there is no pan Indian single rate for the value of the gold bullion bars. The rates will differ in Chennai, Delhi, Kolkata and Mumbai. The oldest association for trading in the gold bullion is “The Bombay Bullion Association Ltd” which was established in 1940 in pre independent India. The gold bullion market is also quite robust at the Multi Commodity Exchange of India Ltd. Or MCX where the trading unit is 1 kg and the price is quoted in per 10 grams.
Why is gold becoming a favored investment?
Currently investing in gold and gold bullion bars has gained prominence in India even for the retail investors, since it’s seen as a safe investment and giving good returns. As the financial markets around the world have taken a beating, along with a drop in the property prices, gold has become a safe market. In 2009, the Indian Government purchased 200 metric tons of gold from IMF (International Monetary Fund) and this made India among the top 10 global gold holders. Almost 80% of the gold is used for domestic consumption for the manufacture of gold ornaments and jewellery. India is also one of the biggest exporters of gold jewelry to the rest of the world.
The current scenario of gold investment around the world: In 2011, January to July, India has already imported 500 tons of gold. Since gold has currently crossed Rs. 28,000 per 10 grams in the bullion gold rate in the past week, the demand for the metal may be subdued during the coming festive months. The gold bullion trading is also seeing extremely high prices since the interest rates in the US and the rest of the markets are extremely low and a lot of speculative money is being channels towards the buying of the precious metal as people are refusing to park their money in other types of assets. Gold is also one of the easiest assets that can be sold as compared to other forms of assets.
