e-gold is similar to shares, where you can hold the same in an electronic form. Interestingly however, you can convert the e- gold into physical units anytime you want.
Ability to trade in e-gold was started by The National Spot Exchange Limited (NSEL) which enables you to buy gold in electronic form, and hold it in a Demat account. e-gold units are traded in a manner wherein one unit equals one gram of physical gold (coin or bar), which can be bought and sold through NSEL.
What's interesting is it directly tracks gold and at the same time eliminates costs associated with holding gold in the physical form.
e-gold is traded as 99.9% pure gold and is immensely liquid offering you the cash anytime. e-gold is much better than Gold ETFs as there are no tracking errors and the returns are slightly more superior to Gold ETFs.
You can buy e-gold by registering with the depository participants listed with the NSEL. There are very nominal holding charges for e-gold.