Should Gold Investment Be Done In Physical Or Electronic Form?

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    Among Indians, gold has never lost its sheen and festivals drive tremendous sales of the yellow metal. Now the big question ahead is that in today's scenario when you are provided with a number of options to invest in the precious metal, including e-gold, gold ETFs, physical gold, Gold Sovereign Bonds etc., which route you should opt for to reap maximum gains.

    As suggested in a recent report, sale of gold will witness a 30% increase on auspicious days. Now, to make the best choice, here is provided the comparison of the different asset classes of the yellow metal. Let us see whether you should invest in gold in electronic or ETF form.

    Experts are of the opinion that while investing in gold, one should take a staggered approach to capitalize on the value cost averaging. Further it is opined that gold should have 10-15% allocation in overall portfolio to hedge against inflation as well as counter any negative returns from other asset classes.

    Physial Gold

    Jewellers in order to lure higher gold sales are offering discount on making charges. Few of the e-tailers are also joining hands with banks to make this occasion profitable both for themselves and consumers. For instance, Amazon in association with ICICI Bank is rewarding its customers on purchase of gold using ICICI VISA card.

    Gold ETFs

    With an option to invest in small denomination, transparency in pricing, tax efficiency as well as high liquidity, gold ETFs has fast garnered the attention of investors. As a result, investment in this electronic asset class of gold is constantly increasing. Know more about Gold ETFs here.

    Gold SIPs

    You can also consider investment into gold through the SIP or Systematic Investment Plan route. By investing in Gold SIP, investors save on the hassles per se storage of the precious metal and also it does away with the need to open and maintain a demat account.

    Gold Sovereign Bonds

    With an annual interest rate of 2.5% payable semi-annually over and above the appreciation value, bonds could be better bet. Gold SGBs can be invested in with a minimum and maximum investment amount of 1gm and 500gm gold respectively. The investors can exit the investment in the 5th year while tenor of the gold bonds is 8 years.

    Story first published: Saturday, April 29, 2017, 8:47 [IST]
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