If you are looking to buy gold bars or biscuits or even jewellery as an investment, it is not the best decision. Gold ETFs, which are traded on the exchanges are better investments than physical gold and jewellery. Here are 7 reasons for the same:
No worries of theft
Since they are held in the electronic form, there is no worry of theft like in the case of gold bars or gold jewellery, where there is a constant worry of theft, deterioration in quality etc. Also, you cannot be sure of the purity as well.
At any given point of time, Gold ETFs, can be bought at the same price throughout the country. On the other hand, other forms of gold are traded at various prices. For example, at any given point of time, gold prices in Chennai would definitely defer from prices in Delhi.
No locker and other charges
You do not have to pay for locker charges, like in the case of physical gold, including jewellery.
Tracks gold prices
Gold ETFs track gold prices and hence you get the price of gold. So, if gold prices go up, your gold ETF prices go up.
So, if it is tracking gold prices and available electronically, why worry about storage and theft.
No making and miscellaneous charges
There are no miscellaneous charges like making charges, which reduces your value in the case of gold jewellery, VAT etc.
So, you earn higher returns when you sell Gold ETFs.
Easy to sell
Gold ETFs are easy to sell and the price discovery is transparent. Your amount is credited to your bank account in 2-days. There is no price discovery in the case of physical gold and jewellery. You will have to search for the best price with several different jewellers.
There is no guarantee of a sale
There is no assurance that your jeweller will buy your gold. In fact, most jewellers do not buy jewellery for cash, unless it is sold by them. No such problem in the case of Gold ETFs.
It will almost always get sold.