How to Invest in Gold: Smart Ways to Secure Your Wealth

In India, gold is not just a metal known for its high market value but also holds great cultural significance. Considered as a symbol of auspiciousness and prosperity, it is an important part of almost every happy occasion, such as festivals, weddings, etc.

Table of Content

• How to Invest in Gold?
• Conclusion

Apart from this, gold is also one of the preferred investment avenues in India. Despite the emergence of various new investment options, the popularity of gold investment remains intact due to its perceived stability and great potential for value appreciation. Especially for individuals with a lower risk appetite, investing in gold is considered an ideal choice.

How to Invest in Gold?

In present times, gold investment is not just limited to purchasing gold in its physical form. There are several other options that allow you to make gold investments and get good returns. To ensure a good ROI, it is essential to understand various options and the advantages they offer before making a choice.

Here are a few popular ways of investing in gold that you can choose from:

Physical Gold Purchase

Gold has always been considered a safe asset during times of economic uncertainty, and buying it in its physical form is a centuries-old practice that is still very popular. For this, you can buy any type of gold item, such as bars, coins, jewellery, etc. Since physical gold is a tangible asset, it offers a sense of security to the investor.

Gold ETFs

Gold ETFs, or Exchange Traded Funds can be defined as a dematerialised form of gold. In this, you buy proportionate ownership of gold in a collective vault and it can be bought and sold like a regular stock. It is somewhat similar to making a direct gold investment where each ETF represents a certain amount of gold (usually 1 gram). The only difference is that you’ll not have your gold assets in physical form, as it will only be its paper representation.

Gold Mutual Funds

A gold mutual fund is similar to a regular mutual fund scheme, but here the money is primarily invested in gold-related assets. The value of these funds changes according to the fluctuations in the market price of gold. As a result, the investor can make a profit from rising gold prices without owning physical gold.

Sovereign Gold Bonds

In 2015, the Government of India introduced the sovereign gold bond scheme under the Gold Monetisation Scheme. These bonds are RBI-mandated certificates, denominated in grams of gold, that allow you to invest in gold without actually buying it.

Usually, the maturity period is 8 years, and at the end of the term, these bonds can be redeemed in cash. The redemption price is calculated on the basis of the average gold price at that time. One additional advantage that Sovereign Gold Bonds come with is that you can avail a loan against them. The procedure of obtaining a gold loan using these bonds is very straightforward, and you don’t need to wait for weeks or months for fund disbursal.

Digital Gold

Digital gold investment refers to the process of buying gold through digital mediums where your assets are held in a virtual format. It is a secure and convenient way to invest in gold, as there is no hassle of storage. Currently, there are several fintech platforms that give you the option to purchase digital gold, and you can make an investment as per your requirements.

In this type of investment, you can either redeem your investment in cash according to the current market price of gold or opt for the physical delivery of a certain amount of gold.

Over the years, gold has gained immense popularity among risk-averse investors as it acts as a safety net against market volatility. Apart from this, it also helps in portfolio diversification while providing a good hedge against inflation. In order to ensure decent returns, it is important that you choose the right form of gold investment.

Suggested Read: What Is Digital Gold and How Does It Work?

Reasons to Invest in Digital Gold & the Risks Involved

Conclusion

At Muthoot Finance, we offer a wide range of options, such as gold mutual funds, gold ETFs, etc., that you can choose from. Here, we also have a team of finance experts who can help you choose the right investment option as per your financial goals. Other than this, we also provide the best gold loan schemes with quick fund disbursal. You can reach out to us to learn more about the gold loan procedure and interest rates.