Small-Time Investors Flock to Commodities in India
Source: Commodity Online (5/26/11)
"Persistently high commodity prices have increased investors interest."
Small-time investors in India are looking at commodity markets more than the traditional equity markets.
Persistently high commodity prices have increased investors interest in the market and even highly volatile trends at the markets didn't prevent scores of new entrants into India's lucrative commodity markets.
Analysts said this phenomenon is catching up in India especially among young investors. Large investors in the country have already sought refuge from the risky currency and equity markets to commodities.
Even though it is a difficult type of investing as Individuals trading on commodities are making a bet on the future value of the commodity.
Among young Indian investors, the most popular commodities include gold, silver, oil and natural gas and there are also takers for coffee and cocoa.
These new brand of investors are choosing these most watched commodities as they are not likely to surprise average investors like them, analysts said.
They added that gold, silver and oil are watched closely because their value can determine what is going on with the economy and young investors are good at calculating these risks.
Gold remains the top commodity for young Indians while silver and oil are the next two big bets.
India has 24 commodity futures exchanges, including three national exchanges that trade online and the turnover on exchanges in 2010-11 were at Rs 119 trillion.