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“Kitna deti hai?”(how much does it give) For a country obsessed with mileage Maruti advertisement hits the right chords. Likewise most of the times when we talk of investment our talk is centered around how much will be the return? Taxation, Liquidity, insurance comes later. This article shows prices of gold and silver and returns in gold and silver. What have been returns of Gold?

Prices of Gold

Gold Price from 1925

Gold Price from 1925

If we plot the Price of gold per gm the chart is as follows:

Gold price chart

Gold price chart

Returns of Gold over different periods is shown in the image below.

Returns on Gold

Returns on Gold

Before 1970, the gold price was pegged to the dollar, so the Indian rupee variant was simply a function of the dollar-rupee exchange rate. Earlier, gold imports were controlled so till 2000 or so, the Mumbai price was 20-30% higher than international prices appropriately converted. WiseWealth Advisors’s 30+ years comparative chart on Gold and Sensex, adjusted for Inflation (pdf) is an interesting read.

Prices of Silver

Quoting from Reserve Bank of India Publication Average Price of Silver in Domestic and Foreign Markets

Average Silver prices from 1970-71

Average Silver prices from 1970-71

2012-13 57602.30 3050.71 53329.11 4273.19
2013-14 46636.80 2145.41 41643.21 4993.59
2014-15 40558.48 1814.04 35611.18 4947.30

If we plot the Mumbai Price of silver in Rupees per kg the chart is as follows:

Chart of Average Silver prices from 1970-71

Chart of Average Silver prices from 1970-71

In 40 years the CAGR on silver is: 10.47% (Using the returns calculator with Starting value for year 1971-72 as 561.35 and final value as 57,315.87 in 2011-12.) WiseWealth Advisors have done interesting 30+ years comparative chart on Silver and Sensex, adjusted for Inflation (pdf) .

WiseWealth Advisors  Must Read:I’m saying this was for first time have compared returns of gold, silver, fixed deposits, and Sensex and suggest why investing in equities make sense.

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Aim was to state the facts and leave it open for interpretation. So does Gold actually glitter? What are your thoughts on price of gold and/or silver?

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