Retail Investors and Gold Buying Behaviour – A Perpetual Study of Indian Retail Investors

Abstract

Gold is one of the oldest precious metals known to man and for years it has been valued as a global currency, an investment, a commodity and an object of beauty and India is not an exception to this. India's love affair with gold is timeless spanning over centuries and millennia. With globalisation various investment avenues were made available to investors. However there is difference in the perceptions of the investors. So this paper makes an attempt to understand the factors that influence the buying behavior of Indian retail investors with respect to gold buying. The objectives of the paper are to identify the favorable and unfavorable perception of the consumers towards their belief in Gold buying behavior, towards their Motives behind the Physical gold buying behavior, towards the Risk behind gold buying (both physical gold as well as Paper form -Mutual fund / ETF) behavior and towards gold buying behavior due to various attributes of gold. The results of the study indicate that the ease at the time of purchase and high liquidity has resulted into Gold being highly preferred Investment Avenue as against the others.

Determinants of Shari’ah gold investment behaviour: the case of Penang, Malaysia

“…As recommended by Gorsuch (1983), this study applies to a minimum of 100 subjects, regardless of the number of items. Thus, 134 responses collected were appropriate.…”

“…A work by Godbole and Arekar (2014) investigated factors influencing Indian retail investors to buy gold. On the same note, Ibrahim and Baharom (2011) examined whether gold investment provides diversification, hedging or safe haven benefits in Malaysia and whether gold domestically acts as a hedge against domestic stock (Ghazali et al , 2015).…”

“…The current work intends to fill the gap of the paucity pertinent to identifying the consumer behaviour on SGI, especially in applying the ITCB. Previous work, such as Godbole and Arekar (2014), investigated the elements that impact the buying behaviour of Indian retail investors when it comes to gold. The work, however, does not catch the current work's purpose which is to investigate the determinants of SGI behaviour from an Islamic perspective by using ITCB.…”

Factors Influencing Investment Decisions in Gold

“…Many people tend to buy gold jewellery such as for family weddings, engagements, birthdays and financial gains (Asha & Christopher, 2014). Also, gold was strongly preferred due to ease at the time of purchase and being highly liquid in comparison to other instruments (Godbole & Arekar, 2014). Moreover, investors prefer to invest on gold relative to other metals, family and friends influence the decision of investors, while the majority of respondents are people and based on the market price, investors are prepared to invest on gold and willing to invest on gold for the purposes of marriage (Sasidharan, 2015).…”

“…The conceptual framework of the study is based on the research conducted by Chitradevi (2017) and some of the variable was also used from the research conducted by Godbole and Arekar (2014). Independent variables and moderating variables are taken as a basis from these researches.…”