Lets check what happened to the logical advice I gave back in my rice article.

If you had heeded my advice of buying gold, instead of keeping your savings in cash(though it was a late advice, and the price of gold will go down anytime till November, that is definitely after November, that is the US presidential elections) how much you would have been unaffected by inflation in India, and rising food prices in America.

The article was published on May 7.

Price of Gold in US $ on May 7: $870 per oz

Price of Indian Rupee on May 7(for our Indian readers): Rs 41.3 per US$

Price of Gold in Indian Rupees on May 7: 35,931

Price of Gold in US$ today(July 11):$964.6 per oz

Price of Indian Rupees in US $ today(July 11): Rs 42.8 per US $

Price of Gold in Indian Rupees on July 11: 41,284

If you had bought 1 oz Gold on 7th May, after reading my article, you would have made, today your savings bank would have had:

$964.6-$870= $94.6 per oz

In Indian rupees:

Rs 41,284-Rs 35,931= Rs 5,353

In percentage: 14.98%

If you had converted your savings, into Gold, since May 7 to July 11, your savings would have grown by around 15% compared to the inflation rate of 12%(well that’s not an accurate comparison, inflation rate on May 7 was around 8%, today its around 12% so that comes out as around 4% inflation between May 7 and July 11, that is every Re 1 you had on may 7 is today worth only 96 paisa compared to every Re 1 you had in gold, is now worth Re 1.15/-) which is going on right now you would have survived much better.

If you had kept your savings in Rupees, since May 7 to July 11, your Rs 35,931/- be now worth Rs 34,493.76(4% inflation difference), a loss of around Rs 1,430/-

If you had kept your savings in bank, then between May 7 to July 11, your Rs 35,931/- would have been by now Rs 36,290.31(At 6% annual inflation rate setup by RBI, that is 0.5% per month, for two months you accrue 1% interest), a loss of around Rs 1,100/-(after adjusting a negative 4% inflation rate).

If you had bought gold and kept your savings in Gold, since May 7 to July 11 your Rs 35,931/- be now worth Rs 41,284/-(we already went through that calculation), a profit of around Rs 5,138.88(after canceling the 4% inflation out).

DISCLAIMER:

1) I do not claim to be a financial consultant of any kind, I do not take responsibility of any profit or loss occurred by following my advice. It is completely non-professional advice, and purely for educational purpose.

2) The calculations I have made are not precise, but only for demonstration purposes. Just because there are precise numbers displayed there does not mean they are accurate.

Sources:

1. http://www.tradingeconomics.com/Economics/Interest-Rate.aspx?Symbol=INR
2. http://sify.com/finance/fullstory.php?id=14713840
3. http://www.x-rates.com/d/INR/USD/graph120.html
4. http://66.38.218.33/charts/livegold.html
5. http://eaindustry.nic.in/