Gold is unlikely to give high returns in 2018 and one needs to invest in it only for diversification. Investors opt for gold ETFs over physical gold— coins or bars—because it removes the problems associated with physical gold, such as purity concerns, storage, etc. However, gold ETFs have started losing their lustre now and are seeing investors exit in large numbers. Gold's lacklustre performance in the last few years is the key reason why ETFs have lost investors' confidence.
While returns on gold ETFs have been diminishing, there are other assets which have fared remarkably well, drawing investors away from gold.
The bonds will generate 3.5% more returns than gold ETFs.
^Last traded price. *Gold price given out by IBJA on (Rs 2,906) used for calculating discount. Source: NSE. Data as on 26 Dec 2017.
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