Is the price of gold going to spike again? Are you looking for a trusted platform to buy gold online? If you’re searching for these answers but don’t know where to start, here is a simple guide to help you invest in gold.
Gold is considered to be a highly secure investment option, as it has the ability to hold its value even after decades and centuries. Furthermore, as per recorded history, the stock market and gold have an inverse relation. This is seen when there are rumours of the market standing on thin ice because of the global debt crisis and the overbought sentiment of the Indian market. The beloved gold is again in the spotlight.
Some options to buy gold include:
- Gold sovereign bond: Sovereign Gold Bonds (SGBs) are a government initiative to substitute holding physical gold, and they are denominated in grams of gold. The Reserve Bank of India (RBI) issues these bonds, and you will be issued a certificate of holding on the date of issuance of the bond. The tenure of the scheme is eight years, with an exit option after five years. In addition to the potential appreciation of this asset, it also provides an assured interest of 2.5% per annum. Moreover, the issue price of gold bonds will be Rs. 50 per gram less than the market value for online investors. Invest in SGBs if you’re looking for long-term investments.
- Gold ETF: Gold Exchange Traded Funds (ETFs) invest in the precious metal and aim to replicate its current market price. These ETFs are traded like stocks on the stock exchange, and you need a demat account to invest in them. Brokerage for these traders may vary from broker to broker. Thus, selecting the right broker is essential.
- Gold mutual funds: Gold funds are open-ended mutual funds with the objective of acquiring high returns by investing in gold ETFs. The returns on these funds could reasonably match that of gold ETFs. One of the advantages of this investment is the automated Systematic Investment Plan (SIP) option, which can be started with a reasonably low amount.
Gold is a great asset class to consider adding to your portfolio and has the potential to provide an excellent return on investment. Hence, in a nutshell, gold is one of the oldest and safest investments. Though the medium of buying gold has changed, a good platform provides users with the ability to undertake a seamless journey to purchase these assets online. If you are stuck with creating a robust portfolio and are trying to figure out how much gold allocation to opt for, it is always prudent to reach out to a financial expert before making any investment.