IMPORTANCE OF GOLD AS AN ASSTES

CLASS IN FINANCIAL PLANNING

Presented by: Gyan Prakash
11304559

Introduction of Reliance capital
Founded in 1986 as Reliance Capital & Finance Trust Limited
1995-Reliance Capital Limited
1700 locations
It has interest in mutual funds, life insurance, general
insurance, stock broking etc
Reliance capital is the largest brokerage and distributor of
financial product in India
2.5 million customers and the largest distribution network.
Reliance securities have over 7 lac retail broking accounts
through its pan India presence with over 7000 outlets.


Reliance ADAG structure
Hierarchy of Reliance Securities
CHAIRMAN (MR. ANIL AMBANI)
GROUP CHAIRMAN/ CEO
(MR. AMITABH JHUN JHUN WALA)
CHIEF EXECUTIVE OFFICER
(MR. SAM GHOSH)
EXECUTIVE DIRECTOR (MR. VIKRANT)
NATIONAL HEAD (MR. RAJIV RATAN)
SEGMENT HEAD (MR. NISHANT SRIVASTAV)
AREA HEAD (MR. SANATH KUMAR)
BRANCH HEAD (MR. NAVEEN KUMAR)
DIRECT
RM, DEALER, SERVICE
MANAGER
INDIRECT
FRANCHISE PARTNER
Objective of The Study
1. To study why India is a largest consumer of gold
2. To analyse the reasons for high demand of gold with rising
prices.
3. To know the gold performance levels in the present market
4. To determine the factors affecting the price of gold
Commodity Market
A commodity market is a market that trades in primary rather
than manufactured products.
The size of the commodities markets in India is also quite
significant of the country's GDP of Rs 13, 20,730 Crore,
commodities related industries constitute about 58 per cent.
Different types of commodities traded-
Metals: Gold, Silver, Platinum, Nickel, Aluminium, Copper etc
Agro-Based Commodities: Wheat, Corn, Cotton, Oils, Oilseeds.
Soft Commodities: Coffee, Cocoa, Sugar etc
Energy: Crude Oil, Natural Gas, Gasoline etc
Introduction Of Gold
Gold is a precious metal with which mankind has had a long
and famous relation and it is the symbol of royalty & prestige.

Gold served as money until other forms of currency were
devised and even now gold is bought as an investment.

Gold In Commodity Market
Type Lot size screen Expiry
Gold 1 kg 10gm 5
th

Gold mini 100gm 10gm 5
th

Gold Gunia 8gm 8gm 30
th

Gold Petal 1gm 1gm 30
th

Financial Planning
Financial planning is the process of meeting your life goals
through the proper management of your finances.
The financial planning process involves the following steps:
1. Gathering relevant financial information
2. Setting life goals
3. Examining your current financial status
4. Coming up with a financial strategy or plan for how you can
meet your goals
5. Implementing the financial plan
6. Monitoring the success of the financial plan, adjusting it if
necessary

Why India Is A Largest Consumer Of
Gold?
1. It is considered a symbol of security and sign of prosperity
2. Gold is ancestral and passed down from generation to generation
3. Gold is viewed as auspicious and intrinsic to weddings ceremony
4. Festivals
5. Gold is universally recognised as a source of wealth
6. In India it is about Savings & Accumulation & not about Profit
Bookings
7. High awareness of price movements
8. It is common for parents of a child to start collecting gold in jewellery for
the childs security, exigency, marriage, etc
9. Most of the Gold collection generally begins in an Indian family from the
Godbharai ceremony, to getting bracelet & anklet of black & white
colour beads to protect the child against the evil eyes
Cont..
Offerings to Gods: Lord Tirumala is the richest religious shrine in the
world with an annual revenue of Rs.1, 200 crore and gold reserves of
almost 250kg that are made up of small ornaments thrown in the hundi. On
an average, the temple receives about 2kg of gold in the hundi every day.
Shirdis Sai Baba's Gold Crown worth Rs.12.5 Lakhs He resides on a
throne of gold weighing 94 kgs. Lalbuag cha Raja collected record Gold
offerings from devotees in 2010. The Golden Temple main dome is gilded
with 100 kg of pure gold
Sentiment and believes of Indian people: Ornaments, such as
mangalsutra, nath (nose ring) and toe rings, quintessential for married
Indian women Jewellery gifted to women at the time of her marriage.
The yellow metal is evident in its use currently for making watches,
medals, shoes, tie, pins, pens, saries, and buttons and so on.

Why Invest In Gold?
Daughters wedding
Golds rarity
Annual returns averaging 29%
Gold is widely recognised for its ability to hedge against inflation and
safeguard wealth during times of economic uncertainty.
Unlike other asset classes, gold is known for keeping and increasing its
value.
Over the last decade, gold investments were one of the best performing
asset classes.
Over the past years, gold has gained in popularity as a retirement asset.
Good security: It is easy to get a loan banks since banks accept gold as
security.
No income tax: Since there is no regular income from investment in gold
the income will not be subjected to tax
Return On Gold Investment
Gold has given average return of 29% per annum which was
any day better than other investment options.

Investing money in gold is worth because it is a hedge against
inflation.

How To Invest In Gold Correctly?
1. Physical gold, jewellery, gold bar/coin
2. Gold ETF
3. Gold fund of funds- invest in Gold ETFs on behalf of you
4. Gold saving funds- These are the mutual funds which invest in real gold.
5. Gold futures: If the price of gold today is Rs 30,000 and a 3 month gold
future price is 30,500, then you can lock the price at this moment to
30,500, so that when you want to buy the gold after 3 months, you get it at
30,500 only.
6. Equity based gold funds- funds are directly not investing in Gold but
investing in the companies, which are related to the mining, extracting and
marketing of the Gold
7. Buy regularly and take delivery later
Gold Price List of Last 10 Years
Swot Analysis Of Gold
STRENGTHS
Gold has ready marketability and Liquidity
Limited Supply
Central Banks are buying more gold
because currencies are falling
Gold is one of the few asset classes which
have performed well in the recent times.
Unique Properties of Gold is use in
medicine
Return on Gold investment has been more
than 29%
Investors generally buy gold as a hedge or
safe haven against any economic, political,
social situation.
WEAKNESSES
Gold is an idle asset with no
regular return profile
Gold storage has costs,
including cost of insurance.
OPPORTUNITIES
Inflation Hedge
Political opportunities
Increasing Household Wealth in
Emerging Markets
Increases Gold Demand
Future Growth in Jewellery
Consumption
THREATS
Drop in Sales of Jewellery
Generally Poor
Economic Conditions reduce the
demand for gold products even
though gold products have a
greater longevity.


Significance Of Gold In Indian
Household
provident and
pension fund
7%
currency
7%
shares and
debentures
6%
Gold
7%
Insurance fund
10%
Depsit fund
16%
physical
saving
47%
festival
21%
bonous
4%
price drops
13%
gifting
12%
impulsive
7%
marriage
43%
Reasons for the rise
1. Festival seasons
2. Low saving rate
3. Inflation
4. Economic crisis
5. A fall in gold supply
6. Political concerns, crisis- After 9/11 terror attacks in the
United States, the demand for gold had gone up.
7. Dollar crisis

Sip In Gold
Period 1 Year 3 Years 5 Years 7 Years 10 Years
Amount Invested
(Rs.)
60,000 180,000 300,000 420,000 600,000
SIP Start Date 01/04/2013 01/04/2011 01/04/2009 01/04/2007 01/04/2004
Gold Price
(Rs/Gm) (As on
March 31, 2014)
2491.67 2491.67 2491.67 2491.67 2491.67
Total no. of units
accumulated
23.18 68.49 139.51 249.27 505.79
Investment value
(As on March 31,
2014) in Rs.
57,753.89 170,653.40 347,613.10 621,101.70 1,260,271.33
Returns on SIP in
Gold (%)
-6.89% -3.44% 5.83% 10.99% 14.21%
Gold: A Safe Haven Asset
Recognized as a form of a tradable liquid asset
A hedge against inflation, rupee depreciation, and social
insecurity
Over 1, 3 and 5 year period Gold has been less volatile than all
major equity indices
Gold is less volatile than equity as an asset class and thereby
helps to stabilize portfolio returns
What Makes Gold Special?
1. Gold is the ideal gift passed on from generation to generation

2. Gold is highly liquid bought or sold 24 hours a day

3. Gold responds when you need it most

Analysis & Interpretation
After completing this project I found that investment in gold is a best
alternative that is available now days in market. People are start investing
their money in forms of gold coins, bars, jewellery and Gold ETF.
If you see the history of gold than you can see that gold has giving a
reasonable return. From the last ten year gold price you will seen than you
can find that it has been given 334% return that will be a bigger return
comparison to other investment.
The price of gold is increasing day by day but still demand was increasing
because gold is known as a symbol of prestige. Indian peoples are very
much interesting to purchases the gold, because they are emotionally and
sentimentally attached with it. Indian peoples are purchases gold at the
time of weddings and festivals due to that India is one of the largest
consumer of gold in all over the world. At the time of festivals peoples also
donate golds to different temples.

Finding
After conducting the research I found that there are many factors which
affects the price of the gold and that are:
1. Inflation
2. Interest rates
3. Economy- When the economic situation is weak with most investments
providing low returns, investors are likely to put their money in gold, as it
is known to perform well during crisis situations.
4. Dollar strength- If the dollar weakens, investors around the world begin
to sell the currency and buy gold for security
5. World instability
6. Demand and supply of gold
7. Central bank and mining companies
8. Production of gold
9. Demand for jewellery by the china and India markets

Conclusion
In this market investor consider investment in gold funds a
better opportunity
Gold clearly is not the asset with the highest long term
expected return. However, gold may provide stability in poor
markets and economic climates, which can enhance the
compound, return of aggressive strategic portfolios.
Gold has proved itself time and again to be the perfect hedge
for inflation.