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5 ways to invest in non-physical gold


Investing in gold is a traditional form of investment and is considered one of the lowest risk investment options. The yellow metal has long acted as a hedge against inflation. In India, gold is also one of the most exported metals. Asset planners often suggest that this precious metal should be part of an investor’s portfolio. In the long run, gold can provide better returns than FD and RD. There are many options available to invest in gold. In addition to buying physical gold which is still popular in India, investors have options such as Sovereign Gold Bonds and exchange-traded funds (ETFs) or mutual funds.

Here are five different ways to invest in non-physical gold:

Some banks, fintech platforms, and major jewelry companies allow investors to buy digital gold. Investing in digital gold is as good as investing in physical gold. It allows investors to buy gold online but eliminates the need for physical storage. Gold purchased as a digital commodity will be stored by the seller on behalf of the customer in insured vaults.

The only downside of investing in gold is that it is not subject to the Securities and Exchange Commission of India (SEBI) regulations.

Investing in a gold ETF is like investing in stocks on the stock market. But unlike physical gold, whose price varies from state to state due to local taxes, a gold ETF reflects the current price of gold. Investors can invest in gold ETFs through their Demat account. Investing in a gold ETF is equivalent to investing in 99.5% pure gold.

Most of your investment goes into physical gold and the rest into Debt Instruments.

A sovereign gold bond or SGB is a government security denominated in grams of gold. Investors must pay the issue price in cash and the bond will be redeemed for cash at maturity. Bonds are issued by the Reserve Bank on behalf of the Government of India. Introduced in 2015, these bonds have an 8-year maturity with a lock-in period of 5 years. However, investors can choose to sell the bond even before maturity. Investors can also bond at any time in the stock market.

Also known as gold savings funds, these are mutual funds that invest in gold ETFs. But unlike ETF, investors do not need a Demat account to be able to invest in the gold fund of the funds. In gold savings funds, an investor invests the majority of his or her assets (90%-100%) in gold ETFs (of the same sister company), a small part can also be in other companies. money market instruments or certain short-term debt products.

Gold futures and options derivatives contracts are available on the Multi-Commodity Exchange (MCX). There are two types of commonly handled gold derivatives, forwards and futures, and options in both. Futures contracts are bilateral reservation agreements, while futures contracts are standardized and traded on registered exchanges.





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