Which is a better investment for Digital Gold & Physical Gold?
In India, gold is much more than a precious metal. For Indians, gold as an investment has much emotional value. For ages, the yellow metal has been seen as the ultimate symbol of wealth and prosperity of a person. When it comes to buying gold, people do not wait for any occasion. From festivals to wedding season, people buy gold for various reasons. The only time people don’t buy gold is probably during the months of ‘Shraadh’ and ‘Adhikmaas’, which most people consider inauspicious.
How to Invest in Gold?
Most Indians, irrespective of their age and income, buy and invest in gold. For generations, Indians have been buying digital gold jewelry or gold coins to prepare for their children’s weddings. Unlike other assets, the value of gold does not depreciate. And people used to transfer the physical gold from generation to generation.
Gold has always been an investment tool to hedge against inflation and your ‘best friend’ in bad times. Even during a crisis, one can quickly sell their gold.
There was a time when the only form of buying gold was in physical form, jewelry, coins, biscuits, or bars. However, in this digital age, there are better and safer options to invest in gold. Now, one can ‘buy’ gold digitally by investing in digital gold; Gold Exchange Traded Funds (ETF), and Sovereign gold bonds.
Buying gold in digital form
Over the past, the craze for gold has remained unchanged. Prompted by the World Gold Council (WGC) efforts, the appetite for gold has increased only. The only change noticed has been in the form of buying gold.
Other than buying physical gold, there are other options to buy gold in digital form. There are several apps, websites, and companies dealing in digital gold. The main difference in buying digital gold is that you are not getting any real gold in your hands while investing in gold. It’s actually like investing in mutual funds, which further invest your money into buying digital gold.
When an investor buys digital gold, the trading companies check the purity of gold and store it in a safe vault in his name. Once the investor sells the gold, it is removed from the vault.
Though digital gold does not offer any passive income to investors, it is more convenient and cost-effective for investors, even for small investors.
Benefits of buying digital gold
While most families prefer to hold gold in physical form purely due to emotional and privacy reasons, there are several challenges.
On the other hand, digital gold investment offers several benefits over buying gold in the physical form. It does not involve any cost in storing it or safeguarding it. There are no purity issues, and since the trading happens online, the entire process is very transparent.
The specific benefits of buying digital gold are listed below: