Various types of gold investment options in India

January 28, 2023 Finance Talk Valli Sarvani No comments

Many people prefer to invest in gold due to its liquidity. There are different types of gold investment options, like physical gold, digital gold, gold ETF, gold mutual funds, and sovereign gold bonds.

The first four are considered liquid investments as they can be bought and sold easily. However, sovereign gold bonds have low liquidity. They cannot be redeemed immediately. Investors have to wait five years and they will have the exit option only after that period.

As the first four types of gold investment options are liquid investments, you can consider investing in any of them. Each type of gold investment option has its own risk.

Here are some key points about various types of gold investment options in India:

Physical gold is one of the most popular types of gold investment in India. Especially in India, many prefer to buy it. However, the gold price fluctuates. The current price of a 1-gram gold coin of 999 purity is around ₹6,000. Theft is one of the most common risks associated with physical gold. Others include loss during manufacturing, purity issues, making charges etc.

Gold ETFs and gold mutual funds are also good investment options. You can start investing from ₹100 in gold mutual funds. 1 gram of Gold ETF is available at around ₹5,000. They are regulated according to the guidelines of SEBI. However, these investments are subject to market risk associated with the volatility of the gold price. This is because gold ETFs and gold mutual funds invest in the stocks of gold mining or refining or physical gold.

Unlike physical gold, you can start buying digital gold with minimal investment, i.e. it is available from ₹1. But the main risk associated with it is the lack of a regulatory body like RBI. Furthermore, there are only 3 players in the market in India.

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Source: https://pixabay.com/en/gold-ingots-golden-treasure-513062/ archive copy