Gold Rush: Its never too late to invest on yellow metal

Did you know you do not need fat wads of greenbacks to buy gold from New York? And, did you know you can purchase it right from your home without having to make a full payment, avoiding several costs and risks associated with it?
Commodities and Metal Exchange Nepal (Comen) has introduced gold as the first metal to the country's futures market under futures contract. A futures contract is an obligation to buy or sell a specific quantity of gold, say, one kilogram, just by investing a part of the total value.
Buying futures obligates one to take delivery at a particular date in the future. To trade in gold futures, one has to initially deposit a margin money of Rs 50,000 for a kg and Rs 30,000 for a half kg, to be delivered within three months.
Some have already made a fortune in past nine months since Comen started the futures trading of the precious yellow metal. "It's never too late to join the gold rush," says Vijay Satyal, CEO and director of Comen. "Futures traders can also dispose it off almost instantly, and certainly on a profit margin."
Why invest in gold? "Because it's a wise investment like equities and land and can easily be converted into money," says Satyal. "Perhaps, no other market in the world has the universal appeal of the gold futures market. Around the world, gold has always established itself as a traditional store of purchasing power and it's gaining ground due to the weakening of the US dollar."
"Gold hit historic highs at $924 an ounce on Friday," he says.
Earlier, one would have to hoard and trade in gold physically. "Now one has the option of not physically stocking it to gain from its price movements," said Dirghayu N Bhari, a business promoter affiliated with the Comen. "Trading in futures is better than the option of hoarding gold," said Bhari. "There are several costs associated with the process of physically stocking gold – transportation, storage, and safety risks, just a few to mention."

The futures trading are certainly not free from risks, though. Here one must trade carefully. Before becoming too excited about the lucrative returns possible from futures trading, it is a good idea to take a sober look at the risks. "Futures traders can however arbitrate and mitigate the risks if they are fully aware of these," said Satyal. Although the risks can be managed, they can never be eliminated, he added.
Managing the risks of trading is a very important part of any trader's success.