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Gold

Tips For Investing In Gold

As we have learned, what are the different options to buy gold in India? This section will discuss a few tips when investing in gold. So, let us start:

 

  • For investors wishing to participate in the volatility in the prices of gold, buying physical gold or bullion is a great option. While owning physical gold requires an initial investment and storage costs, people might find it more comfortable than investing in paper gold.
  • Having said that, jewellery is not really the best option for buying physical gold. Bars and coins have better market acceptability and standardization.
  • If you are an aggressive investor and understand the ways of working of futures and options, there can be no better gold investment alternative than trading gold futures and options. They are an efficient and profitable way of participating in the gold price movement. 
  • For a beginner investor, mutual funds and ETFs are the safest and the easiest way to invest in gold. These are passive investments which require less monitoring from the investor’s side. 
  • If you are completely risk-averse, sovereign gold bonds might be right for you. Bonds which are issued by the Government of India, sovereign gold bonds are the safest of all the options.
  • Keep a long-term perspective while investing in gold. As we have shown you, historically, gold prices have gone up. Hence, in the long run, this trend is likely to continue. If you have a shorter time horizon, you might look at other modes of investment. 
  • Always buy/sell gold through a reputable dealer – be it physical gold or paper gold. Using a well-regulated broker/dealer is always recommended.

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Units 6/7