LOVELY PROFESSIONAL UNIVERSITY

DEPARTMENT OF MANAGEMENT
Report on Summer Training

Key Marketing Strategies For Promoting REL MGP as a Tool For Childs Financial
Planning
Submitted to Lovely Professional University
In partial fulfillment of the
Requirements for the award of Degree of
Masters in Business Administration
Submitted by:
Siddharth gautam
Reg. No. 11205021
DEPARTMENT OF MANAGEMENT
LOVELY PROFESSIONAL UNIVERSITY
JALANDHAR NEW DELHI GT ROAD
PHAGWARA, PUNJAB
(2012-2014)
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Certificate by the Project Mentor

I hereby declare that the project work entitled Key Marketing Strategies For Promoting REL
MGP as a Tool For Childs Financial Planningis an authentic record of my own work carried
out at Reliance Money Ltd., Karol Bagh, New Delhi as requirements of Summer Internship
Project for the award of degree of MBA, Lovely Professional University, Phagwara, under the
guidance of Mr. Farrukh Naddem and Mr. Rahul Tyagi during the period of 1st June, 2013
15th July, 2013.

Siddharth Gautam
11205021

Date: 15th July, 2013

Certified that the above statement wrote by the student is correct. And it is the best of our
knowledge and belief.

Farrukh Naddem
(Mentor Reliance Money)

Rahul Tyagi
(Mentor Reliance Money)

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Abstract

This project report is basically done on the gold which is a component traded in the commodity
market. Gold is an inflation hedge & also short-term fluctuations in Gold offer good potential for
trading. It is in the upward trend and in the current it is safe to invest in the gold.
The basic objective behind the project is to observe the perception of the individuals regarding
Gold and suggesting the marketing strategies for promoting REL MGP as a tool of Childs
Financial Planning.
This project report will help the investors to analyze the right time for investment in the gold.
They will also come to know about the various factors which affect the gold market. While doing
this project the history and the company profile are basically searched either from the internet or
by the literature review of the company. This means that it is basically based on the secondary
source. Also the topic related concepts are done on the basis of the secondary sources. The data
for the analysis is taken either by the consulting the companys employees or from the net. So it
is partially primary and partially secondary. The analysis part is done with the help of Microsoft
EXCEL & SPSS by computing the required output. Finally the conclusions and
recommendations have been written on the self finding basis.

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Declaration

I Siddharth Gautam , student of MBA at Lovely Professional University, Punjab 2012-14

batch, hereby state that the Project Report titled Key Marketing Strategies For Promoting
REL MGP as a Tool For Childs Financial Planning is an original work done entirely by me
and is based entirely on my own observations. It has not previously formed the basis for the
award of any other degree, diploma, fellowship or any other similar title. The facts presented
here are true to the best of my knowledge.
Siddharth Guatam
11205021

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Acknowledgements
This report is the result of continuous effort made and extended by many people. This report would not
have been successful without the kind support from many people. I would first like to thank Lovely
Professional University, Department of Management for designing a platform where we can gain not
only theoretical knowledge but also practical knowledge.

I am greatly obliged to Reliance Money and the whole LEAP TEAM for providing me this
opportunity to work in Reliance Money as a trainee for 6 weeks and give me a platform to learn
and enhance my professional skill.
I would like to express my deep sense of gratitude to Mr. Sandeep Chaturwedi my corporate
guide, for his kind help and support and valuable guidance throughout the project. I am thankful
to him for providing me with necessary insights and helping me out at every single step.
I also express my deep gratitude to Mr. Rahul Tyagi. I am also thankful to Mr. Farrukh
Naddem my summer internship mentor under whose able guidance this project work was carried
out. I thank him for his continuous support and mentoring during the tenure of the project.
I am also thankful to my academic guide Mr. Ashwani Paneshar with deep of my heart who has
given me their co-ordination from time to time. I am also thankful to the entire teaching staff
without which this acknowledgement will be incomplete.
I specifically would like to express my heartiest thank to all the staff members of Reliance Securities,
Karol Bagh branch for their cooperation and their help during the internship as well as in the project. This
project would not have been possible without their patience, time and support.

Siddharth Gautam

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TABLE OF CONTENTS
CERTIFICATE OF THE PROJECT MENTOR........2
ABSTRACT....3
DECLARATION....4
ACKNOWEDGEMENT.5
INTRODUCTION.....7
HISTROY OF GOLD13
WAYS OF INVESTMENT IN GOLD..19
BASIC DESCRIPTIVE TERMS...24
COMPANY PROFILE .36
LITERATURE REVIEW..43
RESEARCH METHODOLOGY..48
DATA ANALYSIS...51
FINDINGS 60
CONCLUSION AND RECOMMENDATIONS.....63
REFERENCES..65
QUESTIONNAIRES 69

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INTRODUCTION

India was mainly characterized by people who saves and saves-heavily. It was the country of
savers. But post-independence the growth has picked its pace and also is the rate of inflation.
Prices of essential commodities like food, housing, gas, electricity, education etc has been
increasing at a dramatic pace of more than 9%. This is one of the biggest disadvantage of a
growing economy, inflation rate seems to fly like a limitless bull. Investment is required to fight
inflation and in addition make your money grow.
INDIA AS INVESTMENT PERSPECTIVE

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India is viewed as investment opportunity by Indian Investors and Foriegn investors as they are
confident in the future growth prospects of India. This confidence is fueled by a consistent GDP
growth of around 8%to 8.5%. Average performance of various asset class is as listed below:

Savings account (3% to 3.5%)

Bonds (6% to 7%)

Bank or Companies Deposits (6% to 7%)

Gold (8% to 10%)

Real Estate (10% to 12%)

Stocks (12% to 15%)

Art (15% to 20%)

Short term investment horizon and GDP growth which is almost assured at 8% to 8.5% the
focus on investors in Indian market shall be more on selecting a suitable asset class for
investment rather than debating of growth and risks of investment. India will grow and top brains
are convinced and assures average retail investors of this growth scene

Gold is primarily a monetary asset and partly a commodity.

More than two thirds of gold's total accumulated holdings account as 'value for
investment' with central bank reserves, private players and high-carat Jewellery.

Less than one third of gold's total accumulated holdings is as a 'commodity' for Jewellery
in Western markets and usage in industry.

The Gold market is highly liquid and gold held by central banks, other major institutions
and retail Jewellery keep coming back to the market.

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Due to large stocks of Gold as against its demand, it is argued that the core driver of the
real price of gold is stock equilibrium rather than flow equilibrium.

Gold ETFs are transparent investment vehicles that will have to conform to rigid
regulations on investment norms and valuations.

Gold ETFs allow investment in gold in small denominations, which makes it easier for
the retail investor to participate.

Gold An Investment Paradise

Gold has been synonymous to wealth and prosperity through the ages. The history of Gold dates
back to as early as 4000 BC when the prehistoric men used it as a tool. Since then Gold has filled
the pages of history as the divine metal that has attracted the attention of men powerful and
otherwise. Gold was the source of power for the kings. Wars were waged; lives were lost as
kingdoms piled up and hoarded tonnes of Gold. In the modern history, Gold became the
international currency as the Gold standard came into existence. Even after the dismantling of
Gold standard, Gold existed as the backbone of international trade and economics as the US
accumulated tones of yellow metal. Till today, Gold has retained its basic use as a commodity
without losing its sheen as a currency.

Gold, because of its ability to protect the wealth of investors can be an ideal addition to a
portfolio. Also the short-term fluctuations in Gold offer good potential for trading. Gold has been
on its long-term upwards trajectory which began in early 2001. This long-term move has been
punctuated by short-term pullbacks offering opportunities for late entrants to join the
bandwagon. With the US economy outgrowing the league of developed nations during the last
two years coupled with the worsening of long-term structural weaknesses and the subsequent
movements in the USD have moved the focus away from Golds use as a commodity. However
the long-term fundamentals of the yellow metal have also undergone a significant change with

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the mining output falling quite steadily during the last decade coupled with an evergreen demand
especially from Asia.
This report analyses the long-term and short-term fundamental factors expected to move Gold
prices. We believe that the short-term weakness expected in gold is a great opportunity for the
late-comers to join the great Gold. Strategically, gold is one of the two most important
commodities on the planet along with crude oil. Gold has been historically recognized as the
ultimate store of value and method of payment. The following characteristics of Gold have
enabled it play this role:

It is durable, homogenous and divisible

Golds rarity gives it intrinsic value and that value is high per unit of volume.

Its value is recognized across the globe and is traded in a continuous market.

Gold is the only financial medium of exchange that is not someone elses liability.

In updating our price outlook, we have considered the following factors:

Investment demand will continue to be the prime driver for the rally in Gold prices,

As economic factors will make gold more attractive compared to other financial assets.

Furthermore strong buying support from the Central Banks of Russia, China and
Middle East countries will help support the rally in Gold prices.

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Mine production will not be able to meet current demand due to lack of new
Discoveries.

The long term average in the Crude/Gold ratio has been around 16 times, but is
Currently only around 10 times.

Objective of the project

The objective of my project is:

To study the current investment scenario.

To analyze the different options available for investment options
To overview the different ways of investment in gold
To acquaint the investor with the factors that affects the investment scenario in gold.
To have the extensive overview on the working system of RELIANCE PRECIOUS

METALS PVT. LTD.

To analyze the different factors which affect the gold market and suggest the investors

about the right time to invest in gold.

Also see that is it the right time to invest in gold or not.

Scope of the study

The analysis of the factors which affect the prices of gold and the investment decisions in gold. A
comparative analysis of these factors has been done on the various parameters like Standard
Deviation, Regression; correlation to make possible the tedious task of analysis of these factors.
Further analyzing the factors will suggest the investors that whether it will be profitable for the
investors to invest in gold or not.

Methodology

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 The history and the company profile are basically searched either from the internet or by
the literature review of the company. This means that it is basically based on the
secondary source. Also the topic related concepts are done on the basis of the secondary
sources.
The data for the analysis is taken either by the consulting the companys employees
or from the net. So it is partially primary and partially secondary.
The analysis part is done with the help of Microsoft EXCEL and SPSS by computing the
required output.
Finally the conclusions and recommendations has been written on the self finding basis.

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History of Gold

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Gold was first discovered as shining, yellow nuggets. Gold became a part of every human
culture. Its brilliance, natural beauty, and luster, and its great malleability and resistance to
tarnish made it enjoyable to work and play with.
Gold is the easiest of the metals to work. It occurs in a virtually pure and
workable state, whereas most other metals tend to be found in ore-bodies that pose some
difficulty in smelting. Gold's early uses were no doubt ornamental, and its brilliance and
permanence (it neither corrodes nor tarnishes) linked it to deities and royalty in early
civilizations

Gold as Money:
Gold, measured out, became money. Gold's beauty, scarcity, unique density (no other metal
outside the platinum group is as heavy), and the ease by which it could be melted, formed, and
measured made it a natural trading medium. Gold gave rise to the concept of money itself:
portable, private, and permanent. Gold (and silver) in standardized coins came to replace barter
arrangements, and made trade in the Classic period much easier.
Gold was money in ancient Greece. The Greeks mined for gold throughout the Mediterranean
and Middle East regions by 550 B.C., and both Plato and Aristotle wrote about gold and had
theories about its origins. Gold was associated with water (logical, since most of it was found in
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streams), and it was supposed that gold was a particularly dense combination of water and
sunlight.Their science may have been primitive, but the Greeks learned much about the
practicalities of gold mining. By the time of the death of Alexander of Macedon (323 B.C.), the
Greeks had mined gold from the Pillars of Hercules (Gibraltar) all the way eastward to Asia
Minor and Egypt, and we find traces of their placer mines today. Some of the mines were owned
by the state, some were worked privately with a royalty paid to the state. Also, nomads such as
the Scythians and Cimmerians worked placer mines all over the region. The surviving Greek
gold coinage and Scythian jewelry both show superb artistry.
The Roman Empire furthered the quest for gold. The Romans mined gold extensively
throughout their empire, and advanced the science of gold-mining considerably. They diverted
streams of water to mine hydraulically, and built sluices and the first 'long toms.' They mined
underground, also, and introduced water-wheels and the 'roasting' of gold-bearing ores to
separate the gold from rock. They were able to more efficiently exploit old mine-sites, and of
course their chief laborers were prisoners of war, slaves, and convicts.
A monetary standard made the world economy possible. The concept of money, (i.e., gold and
silver in standard weight and fineness coins) allowed the World's economies to expand and
prosper. During the Classic period of Greek and Roman rule in the western world, gold and silver
both flowed to India for spices, and to China for silk. At the height of the Empire (A.D. 98-160),
Roman gold and silver coins reigned from Britain to North Africa and Egypt.
Money had been invented. Its name was gold.

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Ways of investment in
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Gold

Coins and small bars

Bullion coins and small bars offer private investors an attractive way of investing in relatively
small amounts of gold. In many countries - including the whole of the European Union - gold
purchased for investment purposes is exempt from Value Added Tax.

Bullion coins
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These coins are legal tender in their country of issue for their face value, rather than for their
gold content. For investment purposes, the market value of bullion coins is determined by the
value of their fine gold content, plus a premium or mark-up that varies between coins and
dealers. The premium tends to be higher for smaller denominations. It is important not to confuse
bullion coins with commemorative or numismatic coins, whose value depends on their rarity,
design and finish rather than on their fine gold content.

Small gold bars

Gold bars can be bought in a variety of weights and sizes, ranging from as little as one gram to
400 troy ounces (the size of the internationally traded London Good Delivery bar). Small bars
are defined as those weighing 1000g or less. According to industry specialists Gold Bars
Worldwide, there are 94 accredited bar manufacturers and brands in 26 countries, producing a
total of more than 400 types of standard gold bars between them. They normally contain a
minimum of 99.5% fine gold. The website provides a wealth of additional information regarding
the international gold bar market.

Gold-backed securities:

Gold is traded in the form of securities on stock exchanges in Australia, France, Hong Kong,
Japan, Mexico, Singapore, South Africa, Switzerland, Turkey, the United Kingdom and the
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United States. By design, these forms of securitized gold investment, all regulated financial
products, are generally referred to as Exchange Traded Commodities or Exchange Traded Funds
(ETFs), and are expected to track the gold price almost perfectly. Unlike derivative products, the
securities are 100% backed by physical gold held mainly in allocated form.

Gold futures
Gold futures contracts are firm commitments to make or take delivery of a specified quantity and
purity of gold on a prescribed date at an agreed price. The initial margin - or cash deposit paid to
the broker - is only a fraction of the price of the gold underlying the contract. That means
investors can achieve notional ownership of a value of gold considerably greater than their initial
cash outlay. While this leverage can be the key to significant trading profits, it can also give rise
to equally significant losses in the event of an adverse movement in the gold price. Futures prices
are determined by the market's perception of what the carrying costs - including the interest cost
of borrowing gold plus insurance and storage charges - ought to be at any one time. The futures
price is usually higher than the spot price for gold. Futures contracts are traded on regulated
commodity exchanges.

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Gold options
These give the holder the right, but not the obligation, to buy ('call' option) or sell ('put' option) a
specified quantity of gold at a predetermined price by an agreed date. The cost of such an option
depends on the current spot price of gold, the level of the pre-agreed price (the 'strike price'),
interest rates, the anticipated volatility of the gold price and the period remaining until the agreed
date. The higher the strike price, the less expensive a call option and the more expensive a put
option. Like futures contracts, buying gold options can give the holder substantial leverage.
Where the strike price is not achieved, there is no point in exercising the option and the holder'
loss is limited to the premium initially paid for the option. Like shares, both futures and options
can be traded through broker
Warrants
In the past, gold warrants were mostly related to the shares of gold mining companies. Nowadays
commonly used by leading investment banks, they give the buyer the right to buy gold at a
specific price on a specific day in the future. For this right, the buyer pays a premium. Like
futures, warrants are generally leveraged to the price of the underlying assets.

Gold Allocated account

Effectively like keeping gold in a safety deposit box, this is the most secure form of investment
in physical gold. The gold is stored in a vault owned and managed by a recognized bullion dealer
or depository. Specific bars (or coins, where appropriate), which are numbered and identified by
hallmark, weight and fineness, are allocated to each particular investor, who pays the custodian
for storage and insurance. The holder of gold in an allocated account has full ownership of the
gold in the account, and the bullion dealer or depository that owns the vault where the gold is
stored may not trade, lease or lend the bars except on the specific instructions of the account
holder.

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Gold Unallocated account

Traditionally, one advantage of unallocated accounts has been the lack of any storage and
insurance charges, because the bank reserves the right to lease the gold out. Now that the gold
lease rate is negative in real terms, some banks have begun to introduce charges even on
unallocated accounts. Investors are exposed to the creditworthiness of the bank or dealer
providing the service in the same way as they would be with any other kind of account. As a
general rule, bullion banks do not deal in quantities under 1000 ounces - their customers are
institutional investors, private banks acting on behalf of their clients, central banks and gold
market participants wishing to buy or borrow large quantities of gold.
Gold pool accounts
There are alternatives for investors wishing to open gold accounts holding less than 1000 ounces.
Electronic currencies
There are also electronic 'currencies' available - linked to gold bullion in allocated storage which offer a simple and cost-effective way of buying and selling gold, and using it as money.
Any amount of gold can be purchased, and these currencies allow gold to be used to send online
payments worldwide.
Gold Accumulation Plans
Gold Accumulation Plans (GAPs) are similar to conventional savings plans in that they are based
on the principle of putting aside a fixed sum of money every month. GAPs is different from
ordinary savings plans is that the fixed sum is invested in gold. A fixed sum of money iswithdrawn automatically from an investor's bank account every month and is used to buy gold
every trading day in that month. The fixed monthly sums can be small, and purchases are not
subject to the premium normally charged on small bars or coins. Because small amounts of gold
are bought over a long period of time, there is less risk of investing a large sum of money at the
wrong time. At any time during the contract term (usually a minimum of a year), or when the

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account is closed, investors can get their gold in the form of bullion bars or coins, and sometimes
even in the form of Jewellery. If they choose to sell their gold, they can also get cash.
Gold certificates
Historically, gold certificates were issued by the U.S. Treasury from the civil war until 1933.
Denominated in dollars, these certificates were used as part of the gold standard and could be
exchanged for an equal value of gold. These U.S. Treasury gold certificates have been out of
circulation for many years, and they have become collectibles. They were initially replaced by
silver certificates, and later by Federal Reserve notes.
Nowadays, gold certificates offer investors a method of holding gold without taking physical
delivery. Issued by individual banks, particularly in countries like Germany and Switzerland,
they confirm an individual's ownership while the bank holds the metal on the client's behalf. The
client thus saves on storage and personal security issues, and gains liquidity in terms of being
able to sell portions of the holdings (if need be) by simply telephoning the custodian. It runs a
certificate programme that is guaranteed by the government of Western Australia and is
distributed in a number of countries.
Gold orientated funds
A number of collective investment vehicles specialize in investing in the shares of gold mining
companies. The term "collective investment vehicles" as used here should be taken to include
mutual funds, open-ended investment companies (OEICs), closed-end funds, unit trusts, and any
similar structures. A wide range of such funds exists and they are domiciled in a number of
different countries. These funds are regulated financial products and as such it is not possible
here to provide details on any specific funds. Funds are likely to differ in their structure - some
may invest simply in the shares of gold mining companies, some may invest in companies that
mine minerals other than gold, some may invest in futures as well as mining equities and some
may invest partly in mining equities and partly in the underlying metal (s).It would be misleading
to equate investment in a gold mining equity with direct investment in gold bullion as there are
some significant differences. The appreciation potential of a gold mining company share depends
on market expectations of the future price of gold, the costs of mining it, the likelihood of
additional gold discoveries and several other factors. To a degree, therefore, the success of the
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investment depends on the future earnings and growth potential of the company. Most gold
mining equities tend to be more volatile than the gold price. While they are subject to the same
risk factors that influence the prices of most other equities there are additional risks linked to the
mining industry in general and to individual mining companies specifically.

Structured products
The market for structured products is dominated by institutional investors - or, in the case of
forwards, by gold market professionals - because the minimum investment can be high. The
following is a general overview of what these products are like and how they work.
Forwards
Like futures, forward contracts are agreements to exchange an underlying asset - in this case,
gold - at an agreed price at some future date. They can therefore be used either to manage risk or
for speculative purposes. But there are important differences between forwards and options
traded in the over-the-counter (OTC) gold market on the one hand, and futures and options
traded on one of the exchanges on the other.

a forward contract (or OTC option) is negotiated directly between counterparties and is
therefore tailor-made, whereas futures contracts are standardized agreements that are
traded on an exchange

although forward contracts offer a greater flexibility and are private agreements, there is a
degree of counterparty risk, whereas futures contracts are guaranteed by the exchange on
which they are traded

Because futures contracts can be sold to third parties at any point before maturity, they
are more liquid than forward contracts (whose obligations cannot be transferred).

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 Gold-linked bonds and structured notes

Gold-linked bonds are available from the world's largest bullion dealers and investment banks.
Their products provide investors with some combination of:

exposure to gold price fluctuations

a yield

Principal protection.

Structured notes tend to allocate part of the sum invested to purchasing put/call options
(depending on whether the product is designed for gold bulls or bears). The balance is invested in
traditional fixed income products, such as the money market, to generate a yield. They can be
structured to provide capital protection and a varying degree of participation in any price
appreciations depending on market conditions and investor preferences.

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Basic
terms
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Descriptive

Investment:

The money you earn is partly spent and the rest saved for meeting future Expenses. Instead of
keeping the savings idle, you may like to use savings in Order to get return on it in the future.
This is called Investment.

Reasons for investment:

One needs to invest to:

Earn return on your idle resources

Generate a specified sum of money for a specific goal in life

Make a provision for an uncertain future

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It is also to meet the cost of Inflation. Inflation is the rate at which the cost of living increases.
The cost of living is simply what it costs to buy the goods and services you need to live. Inflation
causes money to lose value because it will not buy the same amount of a good or a service in the
future, as it does now or did in the past. This is why it is important to consider inflation as a
factor in any long-term investment strategy. The aim of investments should be to provide a return
above the inflation rate to ensure that the investment does not decrease in value.
Right time for investment:
The sooner one starts investing the better. By investing early we allow our Investments more
time to grow, whereby the concept of compounding increases your income, by accumulating the
principal and the interest or dividend earned on it, year after year. The three golden rules for all
investors are:

Invest early

Invest regularly

Invest for long term and not short term

Various options available for investment:-

One may invest in:

Physical assets like real estate, gold/jewellery, commodities etc.

Financial assets such as fixed deposits with banks, small saving instruments with post
offices, insurance/provident/pension fund etc. or securities market related instruments
like shares, bonds, debentures etc.

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Short-term financial options available for investment:

Savings Bank Account is often the first banking product people use, which offers low interest
(4%-5% p.a.), making them only marginally better than fixed deposits.

Money Market or Liquid Funds are a specialized form of mutual funds that invest in extremely
short-term fixed income instruments and thereby provide easy liquidity. Unlike most mutual
funds, money market funds are primarily oriented towards protecting your capital and then, aim
to maximize returns. Money market funds usually yield better returns than savings accounts, but
lower than bank fixed deposits.

Fixed Deposits with Banks are also referred to as term deposits and minimum investment
period for bank FD is 30 days. Fixed Deposits with banks are for investors with low risk
appetite, and may be considered 6-12 months investment period as normally interest less than 6
months bank FDs is likely to be lower than money market returns
*Long-term financial options available for investment:
Post Office Savings: Post Office Monthly Income Scheme is a low risk saving instrument,
which can be availed through any post office. It provides an interest rate of 8% per annum, which
is paid monthly. Minimum amount, which can be invested, is Rs. 1,000/- and additional

investment in multiples of 1,000/-. Maximum amount is Rs. 3, 00,000/- (if Single) or Rs. 6,
00,000/- (if held jointly) during a year. It has a maturity period of 6 years. Premature Withdrawal
is permitted if deposit is more than one year old. A Deduction of 5% is levied from the principal
amount if withdrawn

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prematurely.

Public Provident Fund: A long-term savings instrument with a maturity of 15 years and interest
payable at 8% per annum compounded annually. A PPF account can be opened through a
nationalized bank at anytime during the year and is open all through the year for depositing
money. Tax benefits can be availed for the amount invested and interest accrued is tax-free. A
withdrawal is permissible every year from the seventh financial year of the date of opening of the
account and the amount of withdrawal will be limited to 50% of the balance at credit at the end
of the 4th year immediately preceding the year in which the amount is withdrawn or at the end of
the preceding year whichever is lower the amount of loan if any.

Company Fixed Deposits: These are short-term (six months) to medium-term (three to five
years) borrowings by companies at a fixed rate of interest, which is payable monthly, quarterly,
semiannually or annually. They can also be cumulative fixed deposits 10 where the entire
principal along with the interest is paid at the end of the loan period. The rate of interest varies
between 6-9% per annum for company FDs. The interest received is after deduction of taxes.

Bonds: It is a fixed income (debt) instrument issued for a period of more than one year with the
purpose of raising capital. The central or state government, corporations and similar institutions
sell bonds. A bond is generally a promise to repay the principal along with a fixed rate of interest
on a specified date, called the Maturity Date.
Mutual Funds: These are funds operated by an investment company, which raises money from
the public and invests in a group of assets (shares, debentures etc.), in accordance with a stated
set of objectives. It is a substitute for those who are unable to invest directly in equities or debt
because of resource, time or knowledge constraints. Benefits include professional money
management, buying in small amounts and diversification. Mutual fund units are issued and
redeemed by the Fund Management Company based on the fund's net asset value (NAV), which

is determined at the end of each trading session. NAV is calculated as the value of all the shares
held by the fund, minus expenses, divided by the number of units issued. Mutual Funds are
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usually long term investment vehicle though there some categories of mutual funds, such as
money Market mutual funds, which are short-term instruments.

GOLD CERTIFICATION IN INDIA

Gold is a physical asset its value is based on its purity so to protect customers from any
manupalation government has introduce hallmarking wherein certain standards is given to
the gold based on its purity so that the customers do not suffer.
The government has taken steps to protect the public from buying adulterated gold;

Hallmarking of gold jewelry is one such step. Hallmarking of gold jewelry indicates the
accurate finding out and official recording of the proportionate content of precious
metals present in gold. The marking is done either by laser marking machine or by

punches.
Hallmark is the official mark used in several countries across the world as an assurance

of purity or fineness of gold jewelry.

The Bureau of Indian Standard or BIS was named by the Government as the lone
agency in the country for providing hallmarking of gold jewelry under the provisions of
the BIS Act, 1986.

INDIAN STANDARD GOLD AND GOLD ALLOYS

IS 1417 Grades of gold and gold alloys, Jewelry/Artefacts-Fineness and Marking

IS 1418 Assaying of Gold in Gold Bullion, Gold alloys and Gold Jewelry/ Artefacts Cupellation (Fire Assay Method)

IS 2790 Guidelines for manufacture of 23, 22,21,18,14 and 9 carat gold alloys

IS 3095 Gold Solders for use in manufacture of Jewelry

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MEASUREMENT
Weight Conversion Table
To Convert from

To

Multiply by

Troy Ounce

Grams

31.1035

Grams

Troy Ounce

0.0321507

Kilograms

Troy Ounce

32.1507

Kilograms

Tolas

85.755

Purity
Gold purity is marked assured in terms of karats and fineness
Karat: Pure gold is defined as 24 karat.
Fineness: Parts per thousand thus 18 karat = (18/24) of 1000 parts =750 fineness.

COMMODITY-GOLD
Gold is the oldest precious metal known to man and for thousands of years it has been valued as
a global currency, a commodity, an investment and simply an object of beauty.

MAJOR CHARACTERISTICS

Gold is unique as it is both a commodity and a monetary asset.

Its stability and high value makes it virtually indestructible and ensures that it is almost

31 | P a g e

always recovered and recycled.

There is no true consumption of gold in the economic sense as the stock of gold remains

essentially constant while ownership shifts from one party to another.

Although gold mine production is relatively inelastic, recycled gold or scrap ensures
there is a potential source of easily traded supply when needed, and this helps to

stabilize gold price.

Economic forces that determine the price of gold are different from, and in many cases
opposed to the forces that influence most financial assets.

Gold is a very solid asset. Buying physical gold does have advantages compared with other
investments. Investments in gold-backed financial products and paper gold should be left up to
the professionals," says Mark Robinson, a bullion analyst based in Dubai
.
Gold is the oldest precious metal known to man. Therefore, it is a timely subject for several
reasons. It is the opinion of the more objective market experts that the traditional investment
vehicles of stocks and bonds are in the areas of their all-time highs and may be due for a severe
correction.

Why gold is "good as gold" is an intriguing question. However, we think that the more pragmatic
ancient Egyptians were perhaps more accurate in observing that gold's value was a function of its
pleasing physical characteristics and its scarcity.
CHARACTERSTICS OF GOLD
Durable
The most malleable and ductile element
Consistent

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 A 995 Gold purity level is identical at all places

Valuable
Gold is Precious, is a rare metal and hence Valuable.
Low Risk
Gold is not subject to the risk of bankruptcy or default
Gold cannot be created at will and it is real.

INDIA IN WORLD GOLD INDUSTRY

(Rounded Figures) India (In Tons) World (In Tons) % Share
(Rounded Figures)

India (In Tons)

World (In Tons)

% Share

Total Stocks

15000

160000

Central Bank holding

558

30,100

Annual Production

2450

Annual Recycling

250

1100

23

Annual Demand

700

3550

20

Annual Imports

600

---

---

Annual Exports

60

---

---

33 | P a g e

INDIAN GOLD MARKET

India is the world's largest consumer of gold. Indians normally buy about 25 per cent
of the world's gold, purchasing around 700 - 750 tons of gold every year.

However, the sharp price increase in 2008 and 2009 has impacted demand with total
demand in 2008 dipping to 660 tones. It is further expected to shrink in 2009 with
demand in first three quarters of 2009 totaling only around 265 tons against 553.5 tons
in the same period of the previous year.

As India's domestic primary production of gold is very less, at around 2-3 tons a year,
the country imports most of its domestic requirement.

Thus, India is also the largest importer of the yellow metal and has averaged imports of
around 600 tons a year. However, 2008 imports dipped to around 400 tons of gold and
it is further expected to dip to around 200-220 tons in 2009 owing to high prices.

India's gold demand is firmly embedded in cultural and religious traditions. It is also
valued in India as a savings and investment vehicle and is the second preferred
investment after bank deposits.

Gold hoarding tendency is well engrained in the Indian society and unofficial stocks
held by Indians is estimated to be well above 15,000 tones, which is around 9% of the
total global gold stocks.

Domestic consumption is dictated by monsoon, harvest and marriage season. Indian

jewelers off take is sensitive to price increases and even more so to volatility.

In the cities gold is facing competition from the stock market and a wide range of
consumer goods.

Facilities for refining, assaying, making them into standard bars, coins in India, as
compared to the rest of the world, are insignificant, both qualitatively and

34 | P a g e

quantitatively.

In July 1997 the RBI authorized the commercial banks to import gold for sale or loan
to jewelers and exporters. At present, 13 banks are active in the import of gold. This
reduced the disparity between international and domestic prices of gold from 57
percent during 1986 to 1991 to 8.5 percent in 2001.

Indians have a huge fascination for gold. This is evident in the fact that India is the largest
consumer as well as importer of gold in the world. Gold plays a very important role in the social,
religious and cultural life of Indians. India Gold Market looks poised to achieve greater heights
given the fascination for gold in the country. India consumes about 800 MT of gold which
accounts to about 20% consumption of gold globally. More than 50% of this is used for making
gold jewelry.

The domestic India gold market is estimated to be more than US$15 billion and is expected to
rise significantly in the coming years. During April 2008 to February 2009, gems and jewelry
worth US$ 17.79 billion was exported from the country. United Arab Emirates imported more
than 30% of gems and jewelry from India, making it the largest importer from the country. Hong
Kong was the second largest importer with 25% followed by United States with 20%. The gem
and jewelry industry accounts for more than 10% of India's total commodities exports.

35 | P a g e

FEATURES OF INDIAN GOLD MARKET

Though India is the leading consumer of gold in the world, the gold market in India is largely
fragmented and unorganized. Due to the non availability of a benchmark price, the gold prices in
India vary very much from region to region. The festive and the wedding season in the country
witnesses a heavy demand for gold. Despite the global economic recession, the gold
consumption in the country during these times has not abetted.

FACTORS AFFECTING INDIAN GOLD MARKET

The monsoons and the harvest of the country have a significant affect on the sale and purchase of
gold in the country. Both these factors determine the amount of purchasing power that people
will have, which in turn decides on the amount of gold consumption and other consumptions as
well. Purchasing gold and other precious metals on occasions like Akshaya Tritiya is considered
to be auspicious

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Company Profile

37 | P a g e

About Reliance MyGoldPlan

In India, there are currently various ways to invest and accumulate gold which includes physical
gold bars, gold coins, jewellery, gold ETFS, gold fund of funds and gold futures. The majority of
the demand is for physical gold, the market for which is highly unorganized. Moreover there has
been a distinct increase in the demand for physical gold backed savings product in the last few
years.
So as to assist in the development of a mature gold market in India, Reliance Money along with
World Gold Council as its marketing associate has launched MY GOLD PLAN, which is a next
generation Gold Savings Product. This revolutionary new plan lets customers buy gold
conveniently in small amounts, based on a Daily Average Pricing Methodology. The plan makes
gold accumulation transparent and straightforward, allowing customers to convert accumulated
gold grams into coins or jewellery at multiple outlets across India.
Reliance My Gold Plan offers customers the unique opportunity to start accumulating physical
gold using a daily average pricing methodology. A minimum subscription of Rs.1000 per month
translates to accumulation of gold for as low as Rs. 50 per day.

Reliance My Gold Plan - The Company

Reliance Money Precious Metals Private Limited (RMPM), a Reliance Capital company, offers a
range of innovative products and services related to precious metals. The company endeavors to
make a paradigm shift in the way people save in precious metals, especially gold, by making it
available to a larger set of consumers at convenient price points. The company is registered with
leading Gem and Jewellery associations. RMPM products and services are sold under the brand
name of Reliance Money.

Reliance My Gold Plan Trustee

IDBI Trusteeship Services Limited (ITSL) is India's leading Trusteeship Company. The
company is jointly promoted by IDBI Bank Limited, LIC of India, GIC of India and provides a
wide spectrum of Trusteeship Services. At ITSL, we combine our global capabilities with our indepth local knowledge to deliver expert Trusteeship Services. Our team continually strives to
cater to changing market needs, ensuring we deliver the best to our clients and the industry.
For more information, visit http://www.idbitrustee.co.in

38 | P a g e

Our Marketing Partner

The World Gold Council is the market development organisation for the gold industry. Working
within the investment, jewellery and technology sectors, as well as engaging in government
affairs, our purpose is to provide industry leadership, whilst stimulating and sustaining demand
for gold.
We develop gold-backed solutions, services and markets, based on true market insight. As a
result, we create structural shifts in demand for gold across key market sectors.
We provide insights into the international gold markets, helping people to better understand the
wealth preservation qualities of gold and its role in meeting the social and environmental needs
of society.
Based in the UK, with operations in India, the Far East, Europe and the US, the World Gold
Council is an association whose members include the worlds leading and most forward thinking
gold mining companies.
For more information, visit http://www.gold.org

Safekeeping Agency
Lemuir Secure Logistics Pvt. Ltd. has been appointed as the Safekeeping Agency for the
purpose of storing the Gold purchased on behalf of the customers in secure vaults and thereafter
to the customers at a future date. Lemuir Secure Logistics Pvt. Ltd is the largest logistics service
provider for Bullion import handling and clearance, vaulting and distribution across India. Its
national network spans over 26 cities in India with the capability to rapidly develop additional
locations based on emerging customer needs.
For more information, visit http://www.lemuir.com/pages/services_for_LemuirLogistics.html

Corporate Governance Policy

Our Corporate Governance Policy:

Reliance Money Precious Metals Pvt. Ltd has a vision of being a leading player in the Gold
business and has achieved significant success and visibility in the market.
39 | P a g e

However, an imperative part of growth and visibility is adherence to good conduct in the
marketplace. At Reliance Money Precious Metals Pvt. Ltd, the implementation and observance
of ethical processes and policies has helped us in standing up to the scrutiny of our domestic and
international investors.
Management:
The management at Reliance Money Precious Metals Pvt. Ltd is committed to good corporate
governance, which includes transparency and timely dissemination of information to its investors
and unit holders. The Board of Directors of RMPM is a professional body constituting inter-alia
of, well-experienced and knowledgeable independent members. Regular audit committee
meetings are conducted to review the operations and performance of the company.
Employees:
Reliance Money Precious Metals Pvt. Ltd has at present, a code of conduct for all its officers.
The management believes in the principles of propriety and utmost care is taken while handling
public money, making proper and adequate disclosures.
All personnel at RMPM are made aware of their rights, obligations and duties. They are taken
through a well-designed HR program, conducted to impart work ethics, the Code of Conduct,
information security, Internet and e-mail usage and a host of other issues.
One of the core objectives of RMPM is to identify issues considered sensitive by global
corporate standards, and implement policies/guidelines in conformity with the best practices as
an ongoing process.
RMPM gives top priority to compliance in true letter and spirit, fully understanding its fiduciary
responsibilities.

Features of Reliance My Gold Plan

Daily Cost Averaging

Clear funds from Monthly and Additional Subscriptions shall be split

into 20 equal tranches which shall be utilized over 20 successive
business days for allotment of Gold Grams as per the Daily Gold Price.

Initial Subscription
Amount

Rs. 1000/- and in multiples of Rs. 100/- thereafter. Initial Subscription

can be higher than the monthly subscription amount

Monthly Subscription Rs. 1000/- and in multiples of Rs. 100/- thereafter

Amount

40 | P a g e

Additional
Subscription Amount

Rs. 1000/- and in multiples of Rs. 100/- thereafter. Initial Subscription

can be higher than the monthly subscription amount

Tenure

1 year to 15 years with interval of 1 year

Daily Gold Price

Daily Gold Price (up to 2 decimal points) in Rupees per gram for
24 Carat Gold of 995 fineness shall be declared by RMPM on or
before 11:00 am for all business days. The Daily Gold Price will be
uploaded on www.reliancemgp.com

Gold Grams Allotment Gold Grams of 24 Carat Gold of 995 fineness and upto 4 decimal
points rounded down shall be allotted to the customers under the RMGP Plan
Lock-in period

6 months from the date of initial subscription. Fulfillment of Gold

Grams shall not be permitted during the Lock-in period.

Payment Mode

Cheque / DD / Pay Order / ECS / Direct Debit.

Fulfillment Options

24 Carat Gold of 995 fineness or more available in Gold Coins of

denominations of 0.5 / 1 / 2 / 5 / 8/ 10 / 20 / 50 grams. Jewelry option
also available through empanelled jewelers.

Charges

1.5% Administrative charge. This charge shall be levied on every

Gold Grams Allotment by effecting a mark-up of 1.5% on the Daily
Gold Price. This is a non-refundable fee paid towards setup/
administration costs
No Pre-Termination charges post 1 year of subscription.Pre-mature
termination charge of 2.5% of the cumulative subscription amount paid
shall apply only on fulfillment within 1 year of Customer ID
generation if the cumulative subscription amount is less than 12 times
the monthly subscription amount.
In case the customer doesnt take delivery of coins/jewellery during
the validity period of the voucher then the customer will have to
request for a new fulfillment voucher. The customer shall be liable to
pay "Safekeeping Charge" (towards the cost of storage and Insurance)
at the rate of 0.50% per annum on the Invoice amount. This charge
shall become applicable from the date of issue of original voucher till

41 | P a g e

the date of request for duplicate voucher.

Fulfilment
relatedPayments

The customer will have to make the following payments at the time of
Fulfillment
1Round-off payments to be made for the residual grams. The Daily
Gold Price shall be applicable on the date the fulfillment process runs
as described above
2Coin Making Charges as per the denomination of coins specified
(only applicable for coins)
3Applicable Local Taxes and State levies like Octroi, Entry Taxes, etc
which are calculated on the Pre-Tax Invoice Amount
4VAT on the Pre-VAT Invoice amount which shall be arrived at by
totally the Pre-Tax invoice amount and local taxes and State levies as
may be applicable

Statement of Holding

Statement of Holding will be issued only by email on a monthly basis.

Physical copy of the Statement of Holdings as on the 31st of March
will be dispatched within 20 Business days.

Benefits of Gold Saving Plan at Reliance MGP

DISCIPLINED GOLD ACCUMULATION:

A disciplined accumulation technique under which you accumulate gold grams by making small
but regular subscriptions

COST AVERAGING METHODOLOGY:

All subscriptions made will be split into 20 daily purchases thus reducing the risk of timing the
markets. More Gold Grams will be credited during falling markets and less during rising markets

PLANNING FOR SPECIAL EVENTS:

Plan for a large Gold purchase in the future for special events like daughters wedding, your
wedding anniversary or any other joyous occasions by making regular subscriptions

ZERO DEFAULT RISK:

Appointment of an Independent trustee to manage the bank accounts in which Customer funds
are deposited, ensuring safekeeping of Gold by a Safekeeping agency having insured vaults as
per RBI specifications and ensuring delivery of Gold to the end customers helps create a Zero
Default risk structure.

42 | P a g e

ASSURED PURITY:
24 Karat Gold of 995 fineness or more credited to the customers account up to 4 decimals.

MULTIPLE PAYMENT MODES:

Cheque/DD/Pay Order/ECS/Direct Debit

FLEXIBILITY:
Choice of obtaining the accumulated Gold grams in the form of coins and/or bars across multiple
outlets.

Compare Reliance - MyGoldPlan with other Gold Saving Plans

Features
Backed by Physical
Gold

Reliance
My Gold Plan

Gold ETF

Gold
Jeweller
SavingsFund

Yes

Yes

No

No

GoldCoins/Jewellery*

Cash

Cash

Own
Jewellery
only

Net
AssetValue

Price of
Goldat the
end ofthe
tenure

Fulfilment Mode

Allotment
Price of Gold ateach
Net
Subscription
AssetValue
Mode of
SubscriptionAverage
Pricing
Methodology

Cheque / DD /ECS /
Cash**

Stock
ECS / Cheque
Exchanges
/ DD

Cash

Yes

No

No

No

No

Not
Applicable

Not
Applicable

Yes

Default Risk

No

No

No

Yes

Flexibility to buy gold

fromother Jewellers

Yes

Not
Applicable

Not
Applicable

No

Impurity Risk

43 | P a g e

Fulfilment Centres

Across India

Gold price history for the last 86 years :

44 | P a g e

Not
Applicable

Not
Applicable

At his
outlet

Literature Review

Dooley, Isard and Taylor (1995) conducted a variety of empirical tests to determine if the
price of gold has explanatory power with respect to exchange rates movements. They
used multivariate vector autoregression and cointegration modelling techniques with data
from 1976 to 1990 to test for the short- and long-run influences of gold prices on
exchange rates conditional on other monetary and real macroeconomic variables. They
found that gold price movements have explanatory power with respect to exchange rate
movements, over and above the effects of movements in monetary fundamentals and
other variables that enter standard exchange rate models. This is because they view gold
as an asset without a country and any type of shock that reduces the attractiveness of
holding net claims on A, other things being equal, will normally increase the demands for
other assets, both net claims on B and gold, leading to changes in market-clearing prices.

Sjaastad and Scacciallani (1996) investigated the gold and foreign exchange markets for
the 1982-1990 period. They found that although the price of gold is usually denominated
in US dollars, real appreciations or depreciations of the European currencies have
profound effects on the price of gold in all other currencies and the US dollar has only a
small influence on the gold price. They also found that the floating exchange rates

45 | P a g e

contributed substantially to the instability of the gold price in the period. Fluctuations in
the real exchange rates amongst the major currencies accounted for almost half of the
variance in the price of gold.

Pindyck (1993) used the futures price data to test the ability of the present value model to
explain the prices of four commodities; copper, lumber, heating oil, and gold. He found
that the present value model did a poor job in modelling the price of gold. This was partly
because gold does not have the same level of convenience yield like many other
commodities.

Diba and Grossman (1984) studied the possibility of rational bubbles in the relative price
of gold. They studied whether the rational bubbles exist, that is if the time series of the
relative price of gold obtained by differencing a finite number of times is nonstationary.
They found a close correspondence between the time series of the relative price of gold
and the time series properties of real interest rates, which the theory relates to the time
series properties of the fundamental component of the relative price of gold. Their
evidence is consistent with the conclusion that the relative price of gold corresponds to
market fundamentals and the process generating first differences of market fundamentals
is stationary, therefore actual price movements do not involve rational bubbles.

Chappell and Dowd (1997) made a model for the gold standard which modelled
technology and preferences explicitly and account was also taken of both the durability of
gold and the exhaustibility of gold ore. They examined the steady state and its associated
dynamics, and showed how the steady-state price level responds to changes in exogenous
factors. Provided they had an interior solution with unminted gold in the steady state, this
price level rises with technological progress in gold mining, and falls with increases in
real income and the discount rate.

Ghosh et al. (2004) analyzed monthly gold price data from 1976 to 1999 using
cointegration regression techniques. Their study provides empirical confirmation that
gold can be regarded as a long-run inflation hedge and that the movements in the nominal
price of gold are dominated by shortruninfluences.

Gorton and Rouwenhorst (2006) studied commodity derivatives and their hedging
capabilities in the USA. They used historical data from 1959 to 2004 and found that
indices made from spot- and futures prices had beaten inflation. They also noticed that
the positive correlation with commodities and inflation was higher in the long-run than in

46 | P a g e

the short-run. They also studied whether commodities could also act as a hedge against
unexpected inflation and found a proof for that.

Levin and Wright (2006) developed a theoretical framework based on the simple
economics of supply and demand that is consistent with the view that gold is an
inflation hedge in the long-run, yet at the same time allows the price of gold to fluctuate
considerably in the short-run. Their data covered the period from 1976 to 2005.

Koutsoyiannis (1983) finds a strong relation between gold prices and the state of the US
economy. Similarly, US money supply and PPI announcements impacts on gold prices
have been evidenced in the study of Tandon and Urich (1987). Especially, unanticipated
growth in money supply increases the gold price volatility (Bailey, 1988). According to
Christie-David et al. (2000), gold prices react strongly to CPI, unemployment rate, and
GDP and PPI announcements but not to federal deficit announcements. Cai et al. (2001)
have investigated the factors that move the gold market and have found that employment
reports, GDP, CPI and personal income have an important role in moving the prices of
gold.

Mahdavi and Zhou (1997) compared the performance of gold and commodity prices as
leading indicators of the inflation rate and explored the possibility of improving the
inflation rate forecast by specifying errorcorrection models. They used quarterly price
data for gold from the period 1970 to 1994. They found no evidence for a cointegrating
relationship between the CPI and the London price of gold over the testing period.
However, their study suggests that commodity prices might be a better leading indicator
for CPI since they are cointegrated with the CPI. According to Mahdavi and Zhou, the
relatively poor out-of-sample forecasts of the price of gold is consistent with the view
that short-term movements in the price of gold are too volatile and market specific to
forecast relatively gradual and small changes in the general price level in a satisfactory
manner.

Moore (1990) used a set of signals based on the leading index of inflation compiled by
the Columbia University to examine their relation to the gold price from 1970 to 1988.
He found that if an investor followed the signals and bought gold when the up signal
flashed and sold on the down signal, the investor would have earned an average annual
rate of return of 18 to 20 percent in the period. If he had held gold throughout the period,
his rate of return would have been 13.9 percent, while if he had held stocks or bonds
throughout, the returns would have been 11.2 percent or 8.7 percent per year.

Dr. Ananthapadhmanabha Achar,(2012) analysis on saving and investment behavior on

teachers states that individual characteristics of teachers such as age, gender, marital
status, and lifestyle determined the savings and investment behavior of teaching
community. In a more or less similar manner, their family characteristics such as monthly
family income, stage of family life cycle, and upbringing status emerged as determinants

47 | P a g e

of their savings and investment behavior. Accordingly, the study was confined to different
categories of teachers working in various educational institutions in Udupi District of
Karnataka State with a special emphasis on their attitude and behavior towards
consumption, savings and investments. Hence it is micro study, the findings, discussions
and conclusions cannot be generalized so as to make them applicable to all sections of the
society in all States in India due to differing social-economic and cultural circumstances.

Baur & Lucey (2010) investigated the existence of a hedge and a safe haven in US, UK
and German stock and bond prices and returns and their relationship with gold prices.
They found that gold is a hedge against stocks and gold is a safe haven in extreme stock
market conditions and lastly gold is a safe haven for stocks only for 15 trading days after
an extreme shock occurred.

Ranson and Wainwright (2005) suggest that commodities are the best hedge against
inflation and especially gold and other precious metals perform the best. They examined
periods of high inflation in the Great Britain and USA, and discovered that the price of
gold has gone up 4 years successively before a period of high inflation. The increase in
the gold price has been 2 to 3 times as large as the inflation following the increase and it
has effectively provided a hedge for inflation. Ranson and Wainwright also studied how
an investment in gold could immunize a bond portfolio from inflation. They found that
including 18% gold in a bond portfolio immunizes the portfolio from a rise in inflation.
However, when inflation rate goes down, the inclusion of gold in bond portfolio could
harm the portfolio with its harmful leverage.

Jay Desai, Grishma Tandel, Jairaj Tailor & Rohan Shahi,(2009) a report on buying
behavior of gold with regards to Tanishq stated that people are more price conscious &
they feel that the price in Tanishq are more than what the normal retailers have.
Customers also found that the patterns available are lesser than what they get in the
normal retail store. Tanishq is one of the service oriented jewellery shop so customers are
more attracted because of their service People are not affected with the ambiance of the
shop.

Kulkanya Napompech, Amonsri Tanpipat & Nidpa Ueatrakunkamol,( 2010) investigates

the factors influencing gold consumption for savings and investments by people in
Bangkok Metropolitan area and suggests that consumers give importance to the ups and
downs of oil prices, which rise and fall in relation to the price of gold, in order to
stimulate savings and investments, both government and the private sector should follow
this information and keep consumers updated about oil and gold prices. Although
respondents give importance to the ups and downs of the price of gold, which cannot be
controlled as it is related to fluctuations in the price of oil. Therefore, gold retailers
should use price strategies, such as offering a guarantee to provide confidence to
customers that they will be able to sell it back whenever they want. Entrepreneurs should

48 | P a g e

provide discounts, premiums, exchanges and opportunities for customers to pawn gold
and make it more convenient for customers to sell gold back.

K. Balanaga Gurunathan & S. Muniraj,(2012) study evaluates the impacts of Customer

awareness and buyer Behavior on Buying Jewellery ProductsSpecial Reference to Tamil
Nadu State and concluded that jewellery investment is a unstabilizing activity, the result
shows gold jewellery with mean of 4.60 in the first priority , the silver jewellery with
mean of 2.30 in the second priority, diamond jewellery item with of 1.12 in the third
priority, new methods of investment like Platinum jewellery with mean of 0.62 in forth
priority of customer buying behavior and awareness of jewellery in Tamil Nadu state.

S K Baral, (2012) Empirical study on Investment in Gold as shining option in derivatives

market concluded that investment in gold is an important derivative instrument which has
been widely accepted in order to avoid any kind of financial downturn in future and is
regarded to be one of the safest investments. Gold is an evergreen investment option and
certainly the choice during difficult times and for Indians, gold has traditionally been the
first investment choice, ahead of stocks, debt or real estate.

49 | P a g e

Research Methodology

Research methodology is a way to systematically solve the research problem. It may be

understood as a science of studying and research done scientifically. Research is a procedure of
logical and systematic application of the fundamentals of science to the general and overall
questions of a study and scientific technique by which provide precise tolls, specific procedures
and technical, rather than philosophical means forgetting and ordering the data prior to their
logical analysis and manipulation. Different type of research designs is available depending upon
the nature of research project.
The study about Key Marketing Strategies for Promoting REL MGP as a tool for Childs
financial Planning is descriptive in nature. So survey method is used for the study. Interviews
and questionnaire has been formed. Descriptive and inferential statistics has been used to infer
the population from the sample data to get a better understanding of population at large.
50 | P a g e

1. Methodology/ Procedure of Projects

The methodology followed includes the specification for research design, sample and
questionnaire design, interview along with data collection, data interpretation and presentation
through graphs, cross tabulation using MS Excel and SPSS.

2. Sample Design
The small representative selected out of large population, selected at random is called sample.
Well-selected sample may reflect fairly, accurately the characteristic of population. Thus
understanding the need, sample has been selected on the basis of convenience. The sample size
in total is 60 which include Gold investors and the people who are not actually investing right
now but at least holds the knowledge of different investment avenues.
Purposive Sampling has been for 10 samples that include investor that invest their money in
other assets but as they would have a wide knowledge and could provide us with a wider picture.

3. Questionnaire Design
A set of questionnaire have been designed, filled by the investors who invest in GOLD . The
idea behind this was to get a bigger view of the picture.

4. Sources of Data
Regarding the data collection for the study both primary and secondary sources have been used.

Primary Sources:
Primary data is collected by structured questionnaire administered by sitting with the guide and
discussing problem and people have also been personally interviewed so as to get idea and could
be explained more easily and clearly.
Secondary Sources:

Data has been collected and compiled for the different purpose, which are used in research for
this study. The secondary data include material collected from:
Newspaper
Internet
Books and Articles

5. Assumptions
The research was based on the following assumption:
51 | P a g e

 The methodology used for this purpose is survey and questionnaires. It is assumed that
this method is more suitable for collection of data.
It is assumed that the respondent have filled right and correct option according to their
view.

6. Data Analysis Procedure

The data are analyzed and presented using graphs and further its interpretation has been made.
Cross tabulation (two-way table) has been applied to infer from the sample data what the
population might think and better understanding of population at large.

52 | P a g e

Data Analysis

Gender of the respondents

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response
35

30

30
25

20

20

response

15
10
5
0
male

female

From no. of 50 respondents, 30 were males and 20 were females.

Age of the respondent

response
17

18
16
13

14
12

response

10
8
6

4
2
0
18-22

22-26

26-30

30&above

From my sample of 50 respondents, 5 people are from age group of 18-22 years, 13 are from age
group of 22-26 years, 17 are from age group 26-30 years and only 5 people from respondents are
of age group of above 30 years.

54 | P a g e

Educational Qualification

responses
40
35
30
25
20
15
10
5
0

34

14

responses

2
0

Out of 50 respondent, 0 respondent are not educated, 2 are only primary school educated, 14 are
secondary school passed, 34 are those who had joined the colleges and university.
Income

responses
25

20

20

15

15
10
5

10
5

responses

Out of 50 respondents 5 has annual income less than 10000 Rs/ month , 10 has in between 10000
-20000 Rs / month, 15 has between 20000-30000 Rs / month and 20 has more than 30000 Rs /
month .

55 | P a g e

Do you invest in physical gold?

response

12

yes
no

38

Out of 50 respondents 38 are invest in physical gold and 12 are not invest in gold.

Time period in Gold Investment

response
20
18
16
14
12
10
8
6
4
2
0

19
17

response

10

3
1
less than 1yr 1-3yr

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4-6yr

7-9yr

10&above

Out of 50 respondent, 3 are investing since less than 1 year, 10 from 1-3 years, 19 from 4-6 year,
17 from 7-9 year, 1 from above 10 years.Percentage of your investment that deal in Physical
Gold

response
less than 10%

10-25%

12

17

25-40%
more than 40%

19

Out of 50 respondents, 2 respondents invest up to 10% of their investment in physical gold and
12 respondents invest 10% - 25% of their investment in physical gold and 19 respondents invest
25% - 40% of their investment in physical gold and 17 respondent invest more than 40% in
physical gold.

Type of Gold investment that you do

res
40

36

35
30
25

res

20
14

15
10
5
0
with some local jew.

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with some company

Out of 50 respondents, 36 respondents invest their money in physical gold through local jeweler
and 14 respondents invest their money in physical gold through some company.
Gold Purity Purchased

res
30
25

25
20
15
10

res

15
10

5
0
24K-995

22K-916

18K-750

0
other

Out of 50 respondents, 10 buy gold of 24 carats with 995 fineness, 25 buy gold of 22 carats, 15
buy gold of 18 carats.

Types Of Gold Investment

res
30
25

25

20

res

15
10

10

10
5

5
0
jewellery

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gold coins

gold bar

gold biscuits

Out of 50 respondents, 25 invest in jwellery, 10 invest in gold coins, 10 invest in gold bar, 5 gold
biscuits.

Investment in Physical Gold is risky

res
25
20

20

15

res
10

10

10
5

moderate

low

5
0
ver high

high

very low

Out of 50 respondents, 20 respondents think that riskiness is very high in investing in gold and
10 respondents think that riskiness is high in gold and 5 respondent think that riskiness is
moderate and 5 respondent think that riskiness is low and 10 respondent thinks that investment in
gold is not at all risky.

Rate of return in Physical Gold

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res
25
20

20

15

res
10

10
5

10
5

moderate

low

0
ver high

high

very low

Out of 50 respondents, 20 respondents think that physical gold gives very high returns and 10
respondents think that physical gold gives high return.5 respondent thinks return is moderate and
5 respondent think return is low. But 10 respondents think that physical gold doesnt give any
return .

Liquidity perception of Physical Gold

res
25
20

20

15

res
10

10
5

10
5

moderate

low

0
ver high

high

very low

Out of 50 respondents, 20 respondents think that physical gold very easily convert into cash and
10 respondents think that physical gold convert into cash easily and 5 respondents are not sure
about the liquidity of physical gold. But 5 respondents think that physical gold is not easily
60 | P a g e

converting into cash and 10 respondents think that physical gold is very difficult to convert in
cash.

Gold price
30
25

25
20
15

15

12
10

10
5

14

1011

10

15
always rise
5

better trend
temp low price

Out of 50 respondents, 25 respondents think that gold price always rise and 15 respondents think
that gold price raise for some days. And 0 respondents are not sure about the price fluctuation of
the gold. But 7 respondents think that gold price is not rise always and 3 respondents think that
gold price not rise.

Gold is better as compared to other investment

61 | P a g e

25
20

20
1515

15

15
better inv

12
10
5

10

10

10 10
8

form of jew, gold coins

etc

0
strongly disagree

inv for sev yr

neutral

str agree

Out of 50 respondents, 10 respondents think that gold is a best option to invest as compared to
other investment options and 20 respondents think that gold is a very good option to invest as
compared to other option. And 7 respondents not sure about the best option of investment but 10
respondents think that gold is not good option for investment and 3 respondents think that gold is
not a very good option of investment as compared to other options.

Findings
62 | P a g e

 From no. of 50 respondents, 30 were males and 20 were females.

From my sample of 50 respondents, 5 people are from age group of 18-22 years, 13 are
from age group of 22-26 years, 17 are from age group 26-30 years and only 5 people
from respondents are of age group of above 30 years.
Out of 50 respondent, 0 respondent are not educated, 2 are only primary school educated,
14 are secondary school passed, 34 are those who had joined the colleges and university.
Out of 50 respondents 5 has annual income less than 10000 Rs/ month , 10 has in
between 10000 -20000 Rs / month, 15 has between 20000-30000 Rs / month and 20 has
more than 30000 Rs / month .
Out of 50 respondents 38 are invest in physical gold and 12 are not invest in gold.
Out of 50 respondent, 3 are investing since less than 1 year, 10 from 1-3 years, 19 from 46 year, 17 from 7-9 year, 1 from above 10 years.
Out of 50 respondents, 2 respondents invest up to 10% of their investment in physical
gold and 12 respondents invest 10% - 25% of their investment in physical gold and 19
63 | P a g e

respondents invest 25% - 40% of their investment in physical gold and 17 respondent
invest more than 40% in physical gold.
Out of 50 respondents, 36 respondents invest their money in physical gold through local
jeweler and 14 respondents invest their money in physical gold through some company.
Out of 50 respondents, 10 buy gold of 24 carats with 995 fineness, 25 buy gold of 22
carats, 15 buy gold of 18 carats.
Out of 50 respondents, 25 invest in jwellery, 10 invest in gold coins, 10 invest in gold bar,
5 gold biscuits.
Out of 50 respondents, 20 respondents think that riskiness is very high in investing in
gold and 10 respondents think that riskiness is high in gold and 5 respondent think that
riskiness is moderate and 5 respondent think that riskiness is low and 10 respondent
thinks that investment in gold is not at all risky.
Out of 50 respondents, 20 respondents think that physical gold gives very high returns
and 10 respondents think that physical gold gives high return.5 respondent thinks return
is moderate and 5 respondent think return is low. But 10 respondents think that physical
gold doesnt give any return .
Out of 50 respondents, 20 respondents think that physical gold very easily convert into
cash and 10 respondents think that physical gold convert into cash easily and 5
respondents are not sure about the liquidity of physical gold. But 5 respondents think that
physical gold is not easily converting into cash and 10 respondents think that physical
gold is very difficult to convert in cash.
Out of 50 respondents, 25 respondents think that gold price always rise and 15
respondents think that gold price raise for some days. And 0 respondents are not sure
about the price fluctuation of the gold. But 7 respondents think that gold price is not rise
always and 3 respondents think that gold price not rise.
Out of 50 respondents, 10 respondents think that gold is a best option to invest as
compared to other investment options and 20 respondents think that gold is a very good
option to invest as compared to other option. And 7 respondents not sure about the best
option of investment but 10 respondents think that gold is not good option for investment
and 3 respondents think that gold is not a very good option of investment as compared to
other options.

64 | P a g e

65 | P a g e

Conclusion And
Recommendations

Gold is very sensitive metal because the price of gold is determined from the international
activities. Recommendation to the investor of gold is that excessive reliance on trading strategies
to generate returns can be dangerous and counter productive.
As an investor one should look technical chart like candle stick, line graph, bar chart. In candle
stick one should look for the resistance and support level of the price where he will able to judge
the range in which the price lies, there are different formations in candle stick like ascending
triangle, descending triangle, symmetric triangle on which one should also look for the breaking
or high of the price so that he will be able to take decision were to enter were to exit. In my view
most attractive investment in gold is through REL MGP. REL MGP is easy way of purchasing
gold because we have to pay the minimum of 1000 rs/ month, so it is very easy way of investing
66 | P a g e

in gold. Investor should not fully rely on the news because any news come to market has already
been discounted the big giants always get the news before it reaches the market. That means the
news that come in television, news paper is late and market has already reacted for that news.
For being on the safer side an investor should always enter into the market with hedging or
arbitraging option cause that will assured the investor with a reasonable profit, which in turn
involves low risk.

References
67 | P a g e

Websites References:

https://www.rbi.org.in
http://www.goldresearch.org.in
https://www.ccilindia.com
https://www.investopedia.com
https://www.wikipedia.com
https://www.bseindia.com
https://www.moneycontrol.com
https://www.alibaba.com
https://www.amfiindia.com
https://www.articlebase.com
https://www.mcxindia.com
https://www.gata.org
https://www.kitco.com
https://www.karvy.com
https://www.rateinflation.com

68 | P a g e

Other References:
1.

^ "The Industry Handbook: Precious Metals".Investopedia.

2.

^ Oil and Gold Prices: Correlation or Causation?Nanyang Technological University,

School of Humanities and Social Sciences, Economic Growth centre.

3.

^ Dailygoldpro.com

4.

^ "Gold wavers between small gains and losses". Marketwatch. 2011-07-18. Retrieved 201107-19.

5.

^http://www.forbes.com/sites/robertlenzner/2011/09/25/gold-prices-bound-to-fall-further/

6.

^ "Gold climbs to record high at Rs. 30,750". 19 June 2012.

7.

^ "Gold prices hit yet another peak at Rs 30,420". 13 June 2012.

8.

^ http://www.bbc.co.uk/news/business-22151474

9.

^ a b "Howstuffworks "All the gold in the world"". Money.howstuffworks.com. Retrieved 201003-16.

10.

^ a b "World Gold Council > value > market intelligence > supply & demand > recycled gold".
Gold.org. Retrieved 2010-03-16.

11.

^ "World Gold Council". Retrieved 2008-07-04.

12.

^ Ed Prior (April 1, 2013). "How much gold is there in the world?".

13.

^ "Frequently Asked Questions", World Gold Council.

14.

^ a b "World Gold Council". Gold.org. Retrieved 2010-03-16.

15.

^ "Official gold reserves". Gold.org. Retrieved 2010-03-16.

16.

^ "400 tonnes/year". Gold.org. 1999-09-26. Retrieved 2010-03-16.

69 | P a g e

17.

^ A Gold Play on the Dollar's Demise Seeking Alpha

18.

^ "Gold prices hit record high on global cues".

19.

^ Why gold, silver are up while inflation is low, The Dallas Morning News, September 26,
2010

20.

^ Nathaniel Popper (April 10, 2013). "Gold, Long a Secure Investment, Loses Its
Luster". The New York Times. Retrieved April 11, 2013.

21.

^ "Demand and supply". World Gold Council.

22.

^ "Gold Demand Trends". World Gold Council.

23.

^ "Rush to cash in gold attracts tarnish of possible scams". The Globe and Mail.

24.

^ Adrian Douglas (March 28, 2010). "It's admitted to the CFTC: London gold market is a
Ponzi scheme". Gold Anti-Trust Action Committee.

25.

^ Adrian Douglas (July 11, 2010). "Price suppression follows inevitably from fractionalreserve gold banking".Gold Anti-Trust Action Committee.

26.

^ Dimitri Speck (July 28, 2002), "Gold Manipulation Intraday Charts", Gold-Eagle.com

27.

^ Michael Gray, "Ex-Goldman trader blows whistle on silver and gold manipulation by
JPMorgan, HSBC" New York Post (April 11, 2010). Retrieved May 5, 2011

28.

^ "Andrew Maguire Re-Emerges: Ex-Goldman Trader Exposes JPMorgan, HSBC In Latest

Silver Price Manipulation Class Action Lawsuit" Zero Hedge(November 9, 2010). Retrieved May
6, 2011

29.

^ The Good Delivery Rules for Gold and Silver Bars, LBMA, May 2010, retrieved 21 May
2010

30.

^ RunToGold.com (2009-02-19), "Is the GLD ETF Really Worth Its Metal?", Seeking Alpha

31.

^ a b "Exchange-Traded Funds (ETFs)". Retrieved 2010-05-05.

70 | P a g e

32.

^ World Gold Council: Vaulted gold. In: An investors guide to the gold market, European
Edition, p. 46, December
2011:http://www.gold.org/investment/research/thematic_research/investors_guide_to_the_gold_
market_european/

33.

^ NCDEX.com

34.

^ Nathan Lewis (26 June 2009), "Where's the gold?", The Huffington Post

35.

^ "Supply and demand statistics > World Gold Council, gold market research, reserve asset
and investment statistics". Gold.org. Retrieved 2010-03-16.

36.

^ a b "COMMODITIES-Oil, metals fall on inflation, fear; gold up | Markets | Reuters".

Uk.reuters.com. 2009-02-18. Retrieved 2010-03-16.

37.

^ "Gold, oil reach highs amid U.S. recession fears". Edition.cnn.com. 2008-03-13. Retrieved
2010-03-16.

71 | P a g e

Questionnaire

72 | P a g e

Name _____________________
Occupation_________________

Contact No___________________________
Address_____________________________

1. Gender
a. Male b. Female
2. Age
a. 18-22 b. 22-26

c. 26-30

d. 30 & Above

3. Education Level
a. Not Educated b. Primary School

c. Secondary School d. College/University

4. Monthly Income
a. 0-10000

c. 20000-30000

b. 10000-20000

d. 30000 & Above

5. Do you invest in Gold? (If No then directly go to question no 16)

a. Yes
b. No
6. How long have you participated in the Gold investment?
a. Less than 1 Yr.
b. 1-3 Yr.
c. 4-6 Yr.

d. 7-9Yr.

7. How much % of your investments deal in Gold?

a. Less than 10%
b. 10%-25%
c. 25%-40%

e. 10 & Above

d. More than 40%

8. What type of Gold investment that you do?

a. With Some local Jeweler
b. With Some company
9. What type of Gold purity that you most prefer?
a. 24K-995
b. 22K-916 c.18K-750
10. What type of Gold investment you prefer?
a. Jewellery
b. Gold Coins

d. Other (Please Specify--------------)

c. Gold Bar

11. Do you think investment in Gold is risky?

a. Very high
b. High
c. Moderate

d. Low

d. Gold Biscuit
e. Very low

12. Do you think Gold investment gives you more return and satisfaction?
a. Very high
b. High
c. Moderate d. Low
e. Very low
73 | P a g e

13. Do you think Gold is more convenient in purchase?

a. Yes
b. No
14. According to you, what is the liquidity perception of Gold?
a. Very high
b. High
c. Moderate d. Low
e. Very low
Please choose any ONE of the following answer.
Strongly Disagree
Disagree
Neutral
Agree
Strongly Agree
1

15. Gold Investment

I believe that Gold investment is a better investment choice

I have invested in Gold for several years

I keep Gold in form of Jewellery, Gold Coins, Gold bars etc.

I invest based on rumours

I invest according to my friends advice

I always listen to my family while making investment

decisions
I always do what the others do when there is something
happen

I expect that the Gold price will always rise

I believe that the price of Gold has better trend compared to

other investment assets
While there is a drop in Gold price, I always believe that it is
only temporary.

16. Social Influence

17. Gold Price

18. Why you are not invested in Gold? Please give reason.
74 | P a g e

______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________
______________________________________________________________________________

75 | P a g e