Gold has fallen to a 4 year low and many investors are looking at buying gold in India. Investors should understand that they have a choice between buying gold in the form of biscuits, gold coins or jewelery or buying gold in the electronic form.
Now, there is very little to be frightened when buying gold in the electronic form. Remember, when you buy gold biscuits, gold coins and gold jewelery you have to be concerned about theft, purity, and also storage charges on bank lockers.
There's no question of any of this happening by buying gold in the electronic form or gold ETFs. What is important is that they track gold prices, so you get the same price like that of gold bars and gold biscuits with minimal charges. Read advantages of investing in gold etfs
Take a look at how to trade in gold in India
Remember you would be buying gold by way of gold etfs or through gold futures on the MCX. When you buy through MCX it would be more for the short term and you would need to sell the same after a few months.
Gold ETFs track gold prices and you can buy the same since they are listed on the exchanges. Since they are like shares you can buy and hold them perpetually.
To buy an ETF open an account with a broker. For example, you can open an account with Sharekhan who can assist you with opening a commodity account where you can buy gold futures. If you open a normal share trading account you can buy gold etfs in the same manner as you buy shares. Gold etfs are traded just like shares.
Once you open an account you can see a whole lot of listed gold etfs. You can chose between etfs of UTI, Goldman Sachs, IDBI Gold ETF, SBI Gold ETF etc.
Once you have bought the gold ETF, you can hold it in the electronic form and you can view your holding just as you view the holding of your shares. Ask your broker and he would help you. If you intend trading in gold, you can buy or sell on the MCX, but as mentioned these have to be squared off. If you have no idea of trading in commodities you are better off with gold etfs, which can be bought and held.
Instead of buying gold biscuits, gold bars, gold coins and gold jewelery it is better to buy gold etfs. Trading in gold on the MCX is not for novices and you should have knowledge. Gold ETFs can be bought just as physical gold and they track gold prices.