Gold holds an inevitable place in India’s values and traditions and gold has always generated significant returns over the years. In India, there is always a demand for gold. No matter what the market situation is, gold is a valuable asset internationally. So anytime you want to sell-off your gold, you’ll get buyers no matter what. Gold is a highly liquid asset
As the inflation rate is rising gold tends to rise. Gold is one of the best ways to hedge against inflation. It means that you can buy gold in today’s currency value and can sell it at the value of the currency tomorrow. Thus, hedging or safeguarding the losses occurring due to currency devaluation. Gold is an ideal hedge for financial market risks
It has been observed that during an international crisis, majority people start investing in gold. The main reason why this happens is because of the fear of unknown. And this Speculation causes gold prices to soar significantly, thus having an inverse relation with the market. That’s why gold is known as a “Safe Haven” asset.
Today, with the advent of technology and development in financial markets, investing in gold is just not limited to buying ornaments. One can buy gold through various other unconventional means with benefits like safety, purity, no making charge, etc.
Listed below are some of the best ways to invest in Gold in India
Gold Coins and Bullion:
Physical gold such as gold bars, coins, or jewellery, these are the simplest and most conventional form of investing in gold. Gold bullion, bars and coins are made with a purest physical form of gold. These can be easily sold or purchased easily.
Gold (ETFs) or Exchange Traded Funds are units that represent physical gold. Gold ETFs may be in dematerialised form or paper form. It is convenient to invest in ETFs and there is no risk related to quality or fear of theft. Also you do not have to incur storage charges here, since they are in electronic form. However, to invest in ETFs and make transactions in it, you have to open a demat account. Investors can purchase Gold ETFs online and these ETFs can be kept in their demat accounts.
Gold Mutual Funds:
Gold Mutual Funds are schemes that usually invest in gold ETFs and other related assets. Such schemes do not invest in physical gold directly, instead they invest in gold ETF’s indirectly and take the same position. To invest in Gold Mutual Funds, investors don’t need a Demat account. Unlike in an ETF, you are not restricted to purchase complete units, you start with smaller amounts too. SIPs are a good way to accumulate gold as an investment.
Sovereign Gold Bonds (SGB).
SGBs are another attractive option to invest in gold. Along with the benefits of capital appreciation, investors also get the advantage of interest income by investing in SGB.
You can invest in gold futures. These old Futures are traded on the MCX. These future prices tend to track gold prices, and the contracts have to be settled within a pre-determined period. Gold futures are risky investments as one has to settle futures even when they make a loss.
E-gold or Digi-gold is the electronic mode of investing in gold. It allows conversion to physical gold at any time. It can be bought as e-gold units in the demat form through the National Spot Exchange (NSEL) platform, with each e-gold unit corresponding to 1 gram. E-Gold allows investors to invest in gold with much lower denominations (1gm or 2gm) than physical gold. It is more convenient to buy and sell e-gold. Like we buy physical gold from shops and banks, we can buy e-gold electronically from the exchange. E-gold can be converted into physical gold at any moment of time. One of the benefits of investing in e-gold is that there is no holding cost.