How Can I Invest in Gold Online in India?

Personal Finance

Gold is a highly coveted metal that everyone considers auspicious. This yellow metal has been there as a precious commodity for a very long time. Previously, gold was used as a medium of exchange for various expensive things. Even today, gold has not lost its worth at all. It is still considered one of the most precious metals on Earth. However, investing in gold has become a new trend in recent times. 

As gold has a high market price, people have started investing in gold stocks and gold ETFs to multiply their money. As the price of gold has always been on the higher side, it is always a wise move to process an investment. As Indians have been increasing investments in the digital form, this also reflects the financial literacy of the country. 

This article will help you navigate through gold investment, its features and benefits, and the things you need to know while investing in gold online. 

What is a Gold Stock? 

Buying physical gold is not always possible for everyone, especially for the sake of investment. Hence, they have started investing in gold online. Gold Exchange Traded Funds (ETFs) are simple to invest in. It combines the simplicity of buying gold with the flexibility of stock investment. It has a lot of benefits starting from easy trading facilities to better outcomes. 

There are a few requisites that you need to invest in gold online, just like any other share. The primary requirement is to have a Demat account. A Demat account is similar to that a bank account but can only be used for online transactions related to trading and investment. 

Gold investment in India is highly rewarding. It has given an annual interest rate of about 9.6% over 40 years. As a result, more and more investors have started buying gold stocks.

What are the Benefits of Investing in Gold Online? 

Investing in gold online has a number of benefits, especially since it is more prudential than investing in physical gold. 

  • Easily tradable:

Physical gold has the major drawback of being unable to be traded easily. Most often, during crises, you would have to settle for lower prices for selling physical gold. However, gold in a digital form has higher liquidity and can be easily traded. 

  • Purity as a factor:

When you buy gold, you buy them as jewellery. As gold has exceptional softness, pure 24 K gold cannot be used in making jewellery and they are mixed with other metals. But in the case of the digitalised form of gold, you get the price of pure 24K gold. 

  • No additional costs:

While buying jewellery, you have to bear the additional costs like making charges, which account to be 3% to 25% of the total price of the gold. Whereas, for gold stocks, you don’t have to bear any such costs. 

So, now that we have cleared the purpose of investing in gold online and its benefits. Now, it’s time to focus on where and how to invest in gold

What is the best possible way to invest in gold online in India? 

There are three options that you should consider while investing in gold online. They are SBG(Sovereign Gold Bonds), ETF(Exchange Traded Funds), and MCX Gold Contracts. SBGs are provided by the Central Banking Authority under the supervision of RBI, where you can invest in as low as 1 gram of gold. ETFs are traded funds where 1 unit of ETF equals 1 gram of gold. You can also use MCX gold contracts for investing in gold under Multi Commodity Exchange. 

Now, the best ways to invest in gold online are listed below.

  1. Make sure that you have an active Demat account before you decide to invest in gold online
  2. After you have opened your Demat account, you can start buying gold products from different recognised stock exchanges. You can also buy gold through mutual funds for gold ETFs and SBGs. 
  3. Now, if you want to sell these gold stocks, you can sell them in the secondary market. In case you don’t want to sell them, you can hold onto them until the maturity period. 
  4. There are multiple corporations and organisations that allow you to buy gold digitally, starting from Rs. 1. 
  5. Before you start investing, your e-KYC must be completed, updated, and verified. In addition, you have a new option called the video KYC for updating your KYC details. 
  6. You should be well aware of the risks that are involved in buying and selling gold digitally. You should be aware of the negative growth rates, market volatility, hidden charges, cyber thefts, etc. before jumping ship into this venture. 

Also, you should understand the nature of the market and be sure about your investment goals. If your understanding of the market is decent and your investment goals are clear and practical, you are bound to make a significant profit from investing in gold online. Gold investment has the benefit during unpredictable situations and improves portfolio diversity. 

In conclusion

As gold is a high-performing asset, it is important to know how it behaves in the digital form in the market. As it has outperformed most of the assets in 2022, investing in gold online has gained more trust from investors.

In a pandemic like COVID, gold overcame the inflationary trends and ensured financial security for investors. So, with proper know-how and estimation of your risk appetite, investing in gold stocks can be proved to be a prudential investment. If you want to know more about SBGs, ETFs, equity investment, inflation, market volatility, etc. you should visit Piramal Finance.