Should you buy gold bonds?

New Delhi: After a long slump, gold prices have witnessed a nearly 15% rise to `28,595 per 10 g in the past six months. This may have eased the buying pressure for now, but is the price likely to rise in the near future, creating a buying opportunity? “Internationally, gold prices may fall given the likely increase in interest rates by the US Federal Reserve. In India, however, the prices may rise somewhat if the fundamentals remain intact and the rupee stabilises,“ says Naveen Mathur, Associate Director, Commodities and Currencies, Angel Broking.

Given Indians' long-standing affair with the metal, are they are planning to buy it? If yes, will they stick to their favourite form, physical gold, or move to gold bonds, the new option in the market launched in November last year? “The prices may not be as bearish as they were in November, to create a buying dip, but gold bonds could be the best option by the sheer virtue of the interest (2.75%) you would earn in addition to capital appreciation,“ he adds.

According to a recent ET Wealth online survey conducted among 934 respondents, 48% people are indeed planning to buy gold, but they are not so enthused about picking it up in the form of bonds (20%). This, despite the fact that nearly 71% of financial planners consider it the best option.