Personal Finance Blog India –

Wish to Buy Gold? Know The Options:

Options to invest in Gold:

Here,will not be any investor who can deny the importance of Gold as a safe asset class.

So there are number of modes of investment available in the market.Of course,each one have its own advantage and disadvantage.Investors must check which one is suitable for him before investing.

  • Physical Mode:

This is the most traditional way of investing in Gold.But most of the times the purpose is not the investment.But it is accumulation for childrens marriage,symbol of prosperiry,use at different functions like marriage.It can be in the form ornaments or Gold coins.

It has its own disadvantages also.Most important issues are purity and safekeeping.

We can not assured of the purity as we do not have such expertise in general.Also separate investment in the form of Lockers is required for safekeeping.

  • Gold ETFs:

Gold ETFs are Exchange traded funds offered by some mutual fund houses.Investors must have D-Mat account to invest.This is safe investment and there is no risk of theft as well easy liquidity.

Disadvantage is requirement od Dmat account.There is very less awareness regarding share investments.Also delivery brokerage  payable for each of the transaction.

  • Commodity Exchanges:

Commodity exchanges in India like Multi commodity exchange (MCX),ICEX (Indian Commodity Exchange), NSEL(National Spot exchange). Mcx and ICEX allows future trading only.At MCX we can trade 1Kg Gold,10 Gram GoldM,8Gram Goldguine.

Disadvantage is that there is a risk of down/up side,opposite to position.It is not useful for longterm investment but for short term trading only.

At NSEL,we can purphase apprx 1 Gram as one unit and kept in D mat mode for long time.It requires to open a trading account with NSEL registered broker.

  • Mutual Fund Schemes:

 Mutual fund houses have started to launch Gold Savings Fund Of Fund schemes.Money is invested in Gold Etfs which in turn invests in certified physical Gold.This is the only way where we can invest thorough systematic way.

Disadvantage is that investors are payable of Fund management fees to the respective AMCs.

Category: Commodities


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