Gold has long remained a trusted source of investment for millenia. Investors from across the world have parked their savings in what has historically stood the test of time as an asset class that offers steady long term results. Among all precious metals, too, gold sets a high bar and provides an excellent way to diversify one’s portfolio. As the following figure shows for over fifty years gold has proved to be a sound source of investment:
Source: gold.org (link)
What are some of the options through which one can invest in gold?
Physical gold: Over the years especially in countries like India, gold in its physical form is cherished. It is passed on from one generation to another. Gold jewellery continues to be sought after. One can also buy coins or bars after assessing the precious metal’s purity and get the market prices for that given day. From the beginning, gold as an asset class continues to promise high levels of liquidity and is a good cushion against inflation.
Digital gold: There was a time when one had to buy physical gold and store it either at home or in a bank locker. However, digital gold enables investors to buy small amounts of gold through various online apps and websites for as little as 100 rupees. Digital gold is nothing but an electronic form of money which is backed by gold reserves held in vaults.
In India various apps including Google Pay, Paytm and Phone Pe offer such services. One of the biggest advantages of buying digital gold is that one need not have to go through the hassle of storing it in the physical form. Hence, the investor does not need to pay any locker charges. Indeed there is zero risk of theft. It’s also easy to redeem digital gold.
Gold Exchange Traded Funds: Gold ETFs are traded on various stock exchanges much on the lines of shares. A Demat account is all you need to start the investment journey in gold. Gold ETFs are passive investment instruments that are based on gold prices and invest in gold bullion. In other words, these ETFs are nothing but units that represent gold in physical form which may be either in paper or dematerialised form. Much on the lines of digital gold, investing in a gold ETF is as good as investing in the physical metal itself.
Indeed there are other options like gold mutual funds, but the above are among the top three options out there. If you haven’t already considered gold as part of your investment portfolio, it’s never too late. Historic trends show that the precious metal offers long term returns and continues to shine.
Invest in gold through a variety of options
Gold, over centuries, has been a sought after investment vehicle among investors around the world. In India it has more significance than in other countries given its auspiciousness. Over the last many decades it has also provided steady returns.
There are many ways to invest in gold, the most popular ones being physical gold, digital gold and gold exchange-traded funds. Whereas physical gold has been around for a long time, the other two options are relatively new and offer a slew of benefits including immediate liquidity.
Moneycontrol journalists were not involved in the creation of the article.
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