"Our bank has just offered us a scheme where we will get a 2 per cent discount on gold coins that we buy from them. Then there are gold mutual funds too. We are basically looking at all options now." says Nisha.

The Right Price

Gold prices have indeed crossed the psychological barrier of Rs 10,000 per 10 grams and this has affected demand.

Sanjeev Agarwal, MD, Revah Corporation says, "Due to festivals, the buying continues but demand is lower this year due to high prices."

But that should not stop you from investing in gold. Madan Sabnavis, Chief Economist, NCDEX explains that when the dollar depreciates, gold appreciates. "In the next one to two years we see the dollar depreciating, so gold prices are likely to go up," he says.

To buy or not to buy Gold is known to preserve value over time and be a good diversifier within a portfolio. If there is traditional reason to buy gold, like a marriage, then you have no choice but to buy.

Financial planner Zankhana Shah says, "But if you want to buy gold because you have been doing so every Diwali, just buy it as a token. Looking at the aggressive growth of equities and also the inflation rate, gold is definitely not a very good investment option."

Certified financial planner Karthik Jhaveri explains that about 80 per cent of the cash that you plan to hold could be in the form of gold. Alternately, 50 to 60 per cent of your debt component can be in gold.

Quick Tips

Jhaveri shortlists the best options when it comes to shopping for gold:

1. Gold exchange traded funds

Tip:

Lately, some of the mutual funds houses have started offering gold mutual fund schemes.

2. Gold bars and biscuits

Tip: Prefer buying these from reputed jewellers since they would buy them back at a later date. Banks do not buy back gold coins that they sell you.

3. Jewellery

Tip: Buy them only if you are going to wear them. They are not good investments since 30 per cent of the value is lost in making charges.