Investors looking for instant liquidity without penalties now have an excellent option in digital gold, especially in the post-pandemic period.
Gold has gained popularity as an investment choice in recent years due to geopolitical unrest and market volatility. It has been a preferred form of payment throughout history and is often purchased as a hedge against inflation and political instability due to its minimal correlation with other asset classes. Prominent investment advisors recommend allocating a portion of one's portfolio to commodities, including gold, to reduce overall portfolio risk.
However, in the digital age, investors prioritize speed, safety, and convenience when investing in any asset class.
While gold jewellery has traditionally been seen as a worthwhile investment by many Indian households, it involves various costs such as making charges, gold purity, associated rates, and secure storage expenses. As Indian consumers become more aware, they are increasingly open to products like Digital Gold. Digital Gold allows consumers to purchase gold in its purest form of 24K 999.9, which is securely stored in bank-grade vaults and does not involve making charges.
A recent survey conducted by AxisMyIndia indicates that digital gold has become the most favoured and practical form of investment, largely due to its flexibility, simplicity, and security features it offers to investors.
Guidelines for Investing in Physical Gold
When investing in physical gold, there are certain guidelines to keep in mind. Here are some dos and don'ts for investors:
Dos:
Check prices daily: Gold prices can fluctuate, so it's important to track daily bullion rates to get the best deal
Confirm purity: Gold purity is measured in karats, with 24K 999.9 being the purest form. Ensure the gold's purity before investing.
Verify certification: Look for certification from reputable bodies like NABL (National Accreditation Board for Testing and Calibration Laboratories) or BIS (Bureau of Indian Standards) to ensure the authenticity and purity of the gold.
Insist on a proper bill: Obtain a detailed bill mentioning key information such as price per gram and total weight. This will be useful for future claims or verification.
Don'ts
Avoid tampering with packaging: Gold coins come in tamper-proof packaging. Avoid opening or scratching the packaging if you intend to resell the coin later. Intact packaging ensures the coin's authenticity and purity.
Don't sell back to another jeweler: It's advisable to sell your gold back to the same jeweler from whom you made the purchase. Other jewelers may not honor the making charges, and the original seller can verify the purity level they committed to.
While physical gold has its pros and cons, digital gold has emerged as a robust investment option. Digital gold offers advantages such as safety, security, liquidity, convenient portfolio diversification, and the ability to buy 24K gold in small amounts.
It has gained popularity among millennials and Gen Z. Digital gold eliminates the need for physical storage as reputable providers store an equivalent amount of physical gold in bank-grade vaults under third-party trusteeship. The digitalization trend and changing buying sentiments post-pandemic have led to a shift towards smarter investment options like digital gold.
Why Credibility Counts
When purchasing digital gold, it's important to choose an accredited company with a proven track record, just like with physical gold. This ensures that consumers receive the best value for their money and can obtain certified gold with 24K 999.9 purity. It is crucial to select credible players in the market.
The same principle applies to digital silver as well. Reputable players, such as MMTC-PAMP, offer digital silver with certified purity. These trusted providers also offer redemption options, allowing investors to convert their digital gold into physical gold SKUs that are certified as 24K 999.9 purity.
One of the significant advantages of investing in digital gold is the absence of a lock-in period in most cases. This is beneficial for investors who prefer liquidity and want to avoid exit penalties.
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