Gold has been a symbol of wealth since ancient times. Today this yellow metal is used for portfolio diversification and in that context, it is considered to be an ideal hedge against the potential volatility of equity and stock markets.
One of the major reasons investors use gold as a hedge against inflation is that it has shown lower volatility than equity investments over the long term. Also, there are many instances where gold has always shown an inverse correlation with the stock market.
To invest in gold, either you opt for the physical form or the digital form. You can choose your form of investment on the basis of the amount of investment and gold signals in the market. So here are some ways to make an investment in gold -
#1. Gold Savings Scheme
Gold or jewellery savings schemes come in two forms. A typical scheme will allow you to deposit a fixed amount every month for a fixed tenure. When this period ends, you can buy gold at a value that is equivalent to the total amount deposited. This conversion is done at the prevailing price of gold.
#2. Gold Exchange Traded Funds
If you want to hold gold in a more cost-effective manner, this option is best for you. Gold Exchange Traded Funds happen on the stock market with gold as an underlying asset. All you need is a trading account with a stockbroker and Demat account. The price at which gold ETF is bought is similar to the actual price of gold. The higher buying and selling charges that are incurred in getting jewellery gives an extra hedge to the low-cost gold ETF.
#3. Sovereign Gold Bonds
This is yet another way of owning paper gold. They are issued by the government. The availability of SGB is not on an ‘ on-tap basis’, instead the government will intermittently open a window for fresh sale of bonds to investors. This can happen every 2-3 months and the window will remain open for about a week.
Investors can also purchase bonds from the secondary market. These are the bonds that are issued earlier by the government.
#4. Digital Gold
You can now purchase gold, coins and bars online. This is called ‘Digital Gold’ and is offered by a platform called ‘GoldRush’ there are various other platforms that help to purchase gold online.
#5. Gold Coin Scheme
Gold coins are issued by the government of India and can be bought from jewellers, banks or non-banking financial companies. They are available in denominations of 5 and 10 grams.
People certainly cherish possessing gold in the form of jewellery. The only drawback of getting gold jewellery is ‘making charges’ , which is a costly affair.
We hope that this article helps you to find the best investment option in gold. Also, don't forget to subscribe to live gold tips to get updated information about the gold market.