By Sweekrity Chhetri
Gold is not only used as wearable but also works as a tool to tide over financial emergencies. So, buying gold has been a financial support system over the years. There are ways of owning gold – paper and digital. Some of the various ways to invest in gold are discussed below:
- Gold Bullion: Gold bullion is any form of pure or nearly pure gold that has been certified for its weight and purity. This includes coins, bars, of any size. It is not considered as an ideal investment as it includes making charges, storage cost and purity concerns.
- Gold Jewellery: It is a common phenomenon among the Indians to invest in gold but often a lot of people fail to understand why gold jewellery is an ideal for consumption but is not an ideal investment instrument.
- Gold ETF’s (Exchange Traded Fund): A Gold ETF is an exchange-traded fund (ETF) that aims to track the domestic physical gold price. They are passive investment instruments that are based on gold prices and invest in gold bullion. Gold ETFs are units representing physical gold which may be in paper or dematerialized form.
- SGBs (Sovereign Gold Bonds): SGBs are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity. The Bond is issued by the Reserve Bank on behalf of the Government of India. The Bonds bear interest at the rate of 2.50 per cent (fixed rate) per annum on the amount of initial investment.
- Gold Mutual Funds: Gold Mutual Fund are a type of Mutual Fund that directly or indirectly invest in gold reserves. Investment is usually made on stocks of gold producing and distributing syndicates, physical gold and on and stock of mining companies. It is a convenient way of investing in an asset without having to purchase the gold in physical form.
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