A Beginner’s Guide to Investing in Gold
Since ancient times, Gold has been considered one of the valuable assets and a sign of wealth and prosperity. Gold is a precious yellow metal and acts as a hedge against economic inflation. Gold has been used as money and will always be of value due to scarcity.
Generally, gold prices rise during the wedding season and festivals due to the high demand. When the cost of goods increases, the gold price also peaks. Today, with too many buyers/investors, Gold maintains its charisma as a one-of-a-kind quality, which offers an alternative to conventional stock and bond markets.
With the breakthrough of the Covid-19 pandemic, crushing down the global economy, investors realized the advantages of investing in Gold as an alternative to safeguard themselves financially during such situations.
Investment in Gold does not require a large amount. You can invest in Gold in different ways and benefit yourself. This article will guide you on the journey of other investing methods in Gold.
How to Invest in Gold – a beginner’s guide
Primarily, gold is a metal crafted in 14, 19, 22 & 24 karat. 24 karat promises purity and will give you similar returns when you sell it.
You can invest in Gold in the following ways as mentioned below:
- Invest in Gold jewelry – Women naturally like to invest in gold jewellery to flaunt it as a symbol of wealth that provides a sense of security. If you are financially sound, investment in gold jewellery is a good idea, especially when the gold rate is slightly falling. In India, buying gold on festivals such as Akshay Tritiya and Dhanteras is an auspicious thing to do and a great time to invest in Gold.
- Investment in gold coins & bars – One of the most popular investments in India. People prefer buying and gifting gold coins and bars during festivals or the wedding season. In India, Gold is considered a sign of richness. Moreover, you benefit more than gold jewellery because gold coins have advanced security and anti-counterfeit features that may involve a unique barcode and serial number on every pack of gold coins and gold bars.
Investment in physical Gold will always be a better option because you can sell it when you need urgent cash in hand.
- Gold future contracts – Buying gold is an investment that will benefit sooner or later. Gold future are contracts that are traded on exchanges where the buyer agrees to purchase a precise amount of Gold at a predetermined price on a set future date. Investors can invest their money in the future Gold without paying upfront. So, there is some elasticity in when and how the deal is implemented.
- Digital gold investment – A new form of investment tool that enables you to invest in 24 karat purest gold which is then stored in MMTC-PAMPS secure vaults under your ownership. MMTC-PAMPs is a joint venture between PAMP SA Switzerland & MMTC Limited, a government of India undertaking that is internationally recognized for bringing global standards at par for a wide range of gold and silver products. Digital Gold is 100% secured, providing the highest purity and transparency in pricing. Moreover, you can resell your digital Gold to MMTC-PAMP at the current market value.
- Investment in Gold ETFs – Gold ETFs as an investment are flexible mutual fund schemes based on ever fluctuating gold prices. Stock market fluctuation changes based on the gold price. There is a negative correlation between stock prices and Gold’s value. Hence, when the stock stoops, gold price increases and when the stock market increases, gold price drops.
However, Gold ETFs are safe and more secured than physical Gold or jewellery. There are chances that Physical Gold may get lost, but gold ETFs are protected and have no storage burden. Therefore, when you are investing in Gold ETFs, you need to open an account with a brokerage firm and Demat account.
Concludingly, as mentioned above, these seamless methods will guide you through the gold investment process. Traditionally, Gold is considered a smart investment to overcome dire consequences, whether economic inflation or medical emergencies.