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An Empirical Investigation of Motivating Factors for Investing in Yellow Metal

International Journal of Management Prudence

Volume 1 Issue 1

Published: 2010
Author(s) Name: H. S. Sandhu, Maninder Kaur, Arwinder Singh
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Abstract

Gold is timeless, unique and mystical metal that enjoys a special place of ‘traditional wealth preserver’ in every society. In recent times, amid tumultuous politico-economic environment, the ancient Yellow metal has once again come in the lime-light to lure investors to park their surplus wealth in gold. The present study is an attempt to identify and analyze various motivating factors that induce the investors to invest in Gold. Data was collected on five point Likert’s scale comprising 21 statements relating to various investment aspects of gold. The research instrument was tested for its reliability using Cronbach’s alpha and was subjected to factor analysis with varimax rotation. The study brought out six major motivating factors proving the strategic role that gold plays in investors’ portfolio. ‘Hedge against risk and inflation’ was by far the most important factor followed by ‘Traditionally preferred investment’ and ‘Effective wealth preserver’. Besides, ‘Future financial security’ allures investors to rely on this ancient Yellow metal. Apart from these factors, Gold’s perception as ‘Safe haven during uncertainties’ and ‘High liquidity and marketability’ make it an irresistible alternative asset in the portfolio of savvy investors. Key Words: Gold, Investment, Alternative Asset, Safe Haven.

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