Should You Buy Gold When Govt is Reining CAD?

Indian govt has found a whipping horse in form of gold as they are tightening the import norms by levying additional duty on gold. Moreover now RBI has gone a step further to keep the demand for gold under check, the Reserve Bank of India has tightened the norms for loans against gold jewellery.

RBI said that, ‘In order to standardize the valuation and make it more transparent to the borrower, it has been decided that gold jewellery accepted as collateral will have to be valued at the average of the closing price of 22 carat gold for the preceding 30 days as quoted by the Bombay Bullion Association (BBA)’.

We feel that gold is a good investment bet for the long term and has been in demand since Egyptian era. Moreover; the gold has always stood the inflationary times and returned handsome dividend. Thus you will not be unpatriotic if you buy gold as it has to be a part of your portfolio. However in short term we may see gold under some pressure; but long term trend for gold remains bullish. You can check latest gold tips here and can also understand that how jewellers can help reduce CAD and help Govt of India.