Gold is an investment that has been around since the beginning of time, and it’s not going anywhere soon—people always want gold. In fact, over the last few years, there has been a surge of investing interest in paper gold options like ETFs and bonds. However, if you are interested in purchasing physical gold coins or bars, then you have to know some basic information about how to invest in gold in India.
How to invest in paper gold in India?
Paper Gold is an investment in gold that doesn’t involve actually buying physical gold. It can be done by purchasing an exchange-traded fund (ETF), sovereign bonds, or digital gold. While physical gold has a price per gram, and you pay that amount to buy the metal, paper gold comes with a fixed price or bond — but it does come with associated risks.
Paper Gold can be accessed through any stockbroker who deals in commodities, such as Goodwill Wealth Management.
Physical Gold
Physical gold is the most popular way to invest in gold because it has an intrinsic value. In other words, you can buy physical gold as coins or bars that have been created by a mint and stamp them with their weight and purity mark. You can also buy jewellery items made from pure or plated gold.
Gold has long been considered a haven for investors who want to protect their wealth against inflation and negative interest rates. Gold’s low correlation with other assets makes it an attractive investment option for those looking to diversify their portfolio over time.
Gold ETFs
What are ETFs?
An exchange-traded fund (ETF) is an investment fund traded on stock exchanges, much like stocks. It holds assets such as stocks, commodities or bonds and divides ownership into units.
How does an ETF work?
A traditional mutual fund invests in a basket of securities that belong to a specific asset class, such as equity or debt. ETFs work on the same principle but operate similarly to stocks: The price of the ETF changes throughout the day based on the supply and demand for its units by investors. The value per share is calculated by dividing its net asset value (NAV), which represents its total assets minus liabilities divided by the number of outstanding units.
What are the benefits of investing in ETFs?
ETFs, offer investors several benefits, including low costs and tax efficiency. They also provide greater flexibility than mutual funds because they can be traded during the day, just like stocks. Investors can also purchase or sell ETFs through an online broker or a financial adviser.
Sovereign Gold Bonds
Sovereign Gold Bonds are issued by the government of India to help it raise funds. These bonds are not taxed, and you get tax exemption if you invest in them under Section 80C of the Income Tax Act, 1961.
The interest rate on these bonds is decided every quarter based on market forces. The interest rate for FY19 has been set at 2% per annum (2% p.a.). You can buy Sovereign Gold Bonds from banks and post offices operating in India on behalf of Ministry of Finance (Department of Economic Affairs).
Digital Gold
Digital Gold is a type of digital asset that is backed by physical gold. It can be stored on a blockchain network and can be used as a medium of exchange to purchase goods and services.
Digital Gold is generally not considered a legal tender or currency, but it has some properties similar to standard currencies (like Bitcoin). These include being fungible, which means that each unit has equal value with other units of the same type.
So they can be divided into smaller parts without losing their value; durable (they don’t degrade over time); portable (can be transported from place to place); scarce and easily identifiable through unique features such as serial numbers.
Conclusion
If you are looking for a safe investment, gold is the best option. It has been proven over time that gold will always retain its value. Gold ETFs and physical gold have become popular options for investors worldwide to invest in paper gold. While there are many ways to invest in paper gold, sovereign bonds are another way of investing in physical gold without having any burdensome regulations or high costs attached to it.
If you are interested in investing in gold, then you can go through Goodwill Wealth Management, one of the top 10 commodity companies in India. Register today and enjoy the benefits of the best commodity trading company in India. So why wait? Contact us today!
