MUMBAI // Gold remains an important investment in India amid volatility in equity markets.
"Gold should be there in the portfolio for risk protection," said Lalit Nambiar, a fund manager and the head of research at UTI Asset Management in Mumbai.
"Investors would have already got the benefit of a weak rupee and surge in gold prices in the past six months," the analyst was quoted yesterday as saying in the business publication Mint.
Gold prices have hit record highs in India in recent trading sessions. Globally, they have increased to a four-month high on anticipation of monetary easing by central banks including the US Federal Reserve.
Madhavi Mehta, an analyst at Kotak Commodity Services, forecasts that international gold prices could hit US$1,750 to $1,800 an ounce. A jeweller at Gurjar Gold and Diamonds in Mumbai said that there had been an increase in inquiries from investors because of the recent movement in prices following weeks of stagnant metal prices. Gold plays an important role in Indian's culture and gift-giving traditions during religious festivals and weddings, partly explaining why India is the world's biggest consumer.
"[Indians] think of gold not only as an investment," said Dimpesh Jain, the manager of Motaba & Sons, a jewellery store in Mumbai. "It's a passion, a tradition."