Is Gold and Real Estate at Loss this Financial Year 2014?
Ever since the lofty debacle of gold in 2013, it has barely revived. Last year, gold lost about 28.3 per cent in terms of dollars while 18.7 per cent in terms of rupee.
At the beginning of 2014, gold further made a loss of 3.8 per cent in rupees and 3.6 per cent in dollars. The domestic price of gold varies more often when compared to the global market; this is mainly due to the imposition of several taxes and duties along with the dollar-rupee exchange rate gyration. In real estate business, Hyderabad had been the foremost of all cities to experience price rise but the uncertainty over Telengana despaired it in a way. Also the inflation is also one of the biggest reasons why the real estate market has given negative or null returns over the past 12 months.
The National Housing Bank (NHB) Residex proper index for price of houses also marks a slowdown in regards to realty prices. The index is updated till July, 2014. The Residex records an increase of 10% for Hyderabad, Chennai and Ahmadabad while 5% for Mumbai and null for Bangalore and negative values for Delhi.
In case of long term investment in gold, this barely matters or makes any difference for about five to ten years. Losing money out of investment in gold can only happen if you are investing it for a shorter period of time. To understand the reason for this we will have to ascertain the reasons why gold will perform well in the future and why it fared well in the past.
Gold has hardly any use other than ornamentation hence it has no long term store value. At the times of global uncertainty the price of gold varies a lot. This had been seen after the incident of 9/11 which leads to the world’s biggest financial crisis in 2008. Gold value started to fall ever since the US remarked recovering signs from the post Lehman slump, last year.
Source: Money Control
