Has the spiralling increase in the price of gold and silver lured the common man to look at investing or trading in the commodities market?

From the queries raised this morning at a seminar, Growing Wealth through Commodities, hosted by Angel Broking, it appears so.

The hall was packed, and the attendees comprised traders, investors – individual and corporate, including quite a few women.

The participants were generally keen to know if investment in commodities such as gold and silver would be a safe bet; whether price of the bullion would further move northwards; what precautions should an investor take while investing in commodities market and so on. And the team from Angel Broking simply said “whether interest rates moved up or down, commodities are here to stay for longer cycles”.

“With Governments evincing interest in infrastructure development and projects, the demand for commodities would only swell. In fact, commodities may perform well when the market for stocks and bonds turn negative or neutral,” an analyst from the broking firm said.

The focus of the event was on the recent splurge of movements in the commodity market, which seems to have opened up a new avenue for retail investors and traders to participate.

“The sharp spike in the commodities market has certainly shifted the investor's focus from equities to commodities. Such educative seminars would give the investor/trader an opportunity to learn the nuances of commodities trading,” Mr Naveen Mathur, Associate Director (Commodities and Currencies) at Angel Broking, told Business Line.

He said that the Indian commodities space entered its marathon journey with investors moving from “walking to jogging” in commodities, signalling a matured investment environment. “Recognising this investment avenue as an asset class, the growth in this market has been unprecedented. Gold has emerged as the most preferred investment avenue, broadened the investor's horizon over commodities trade and spread their portfolio to other commodities as well,” he added.

The Indian commodity Exchanges turnover has surged from Rs 13,500 crore in 2006-07 to over Rs 90,000 crore now, and the analysts were gung-ho about the investment opportunities in this space.

According to Mr Mathur, the broking firm would host a chain of such events. The first was conducted at Indore last month.

(This article was published on November 20, 2011)
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