{"id":11724,"date":"2020-09-14T05:01:47","date_gmt":"2020-09-14T05:01:47","guid":{"rendered":"\/blog\/?p=11724"},"modified":"2025-02-17T12:50:50","modified_gmt":"2025-02-17T07:20:50","slug":"different-ways-of-investing-in-gold-and-their-uses","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/wealth-services\/different-ways-of-investing-in-gold-and-their-uses\/","title":{"rendered":"Different Ways of Investing in Gold and their Uses"},"content":{"rendered":"\n

Introduction<\/strong><\/h2>\n\n\n\n

Gold investments are  viewed as safe investment options during times of economic\nturmoil as the gold market tends to move in the opposite direction of equities.\nThus, investing in gold is regarded as a means of hedging one\u2019s portfolio against\nmarket volatility, which is particularly important in today\u2019s economic climate.\nThe price of gold has been increasing throughout 2020, moving alongside\ngrowing  investor concerns over\neverything from the U.S China trade War, to the threat of long-term economic\nrecession caused by COVID-19. <\/p>\n\n\n\n

Gold can be bought and invested  in through a variety of ways, including\npurchases of physical gold and online investments. Here are the different ways in which you can buy gold. <\/p>\n\n\n\n

Types of <\/strong>Gold Investment<\/strong><\/h2>\n\n\n\n

Physical Gold<\/h3>\n\n\n\n

1. Jewellery <\/h4>\n\n\n\n

Jewellery is similar to\ninvesting in gold coins or bars, however, it is better to view them as expenses\nrather than an investment. An important reason for the same is due to the\nadditional cost of having the gold turned into jewellery. If one were to sell\ntheir jewellery, they would not receive that additional cost back, referred to\nas \u2018making charges\u2019. Furthermore, the price of your jewellery can be affected\nby the performance of the gold itself. <\/p>\n\n\n\n

These additional charges can\nrange from 5% to 23% based on the jewellery being fashioned. An advantage of\nthe same however is that the jewellery can be used as a possession by the owner\nthough that has little relevance if the purpose of investing in the gold is as\na long-term investment strategy. <\/p>\n\n\n\n

2. Coins and Bars<\/h4>\n\n\n\n

Gold coins and bars do not have much use, all things considered. They\nare a valid and safe\ninvestment option and require\nadditional making charges, though it is far less than it would be for\njewellery. <\/p>\n\n\n\n

However, both of the previous two options also come with the risk of\nphysical damage or theft, and thus storing wealth in them can get tricky. <\/p>\n\n\n\n

3. Gold Savings Schemes <\/h4>\n\n\n\n

These are schemes run by jewellers. One must deposit a sum every month and once this matures one can buy gold of the same amount from the jeweller. It is even possible to get an additional amount at the end of your total amount. However, while that may be an advantage, there are several risks such as the level of trust that is required to invest with a particular jeweller. Making charges are also applicable ranging from 5% to 23% <\/a>even. These additional expenses may negate the bonus amount they choose to give you which means that the overall returns actually diminish over the period.<\/p>\n\n\n\n

Additional Read:<\/strong> Why Gold is a Safe Investment Tool in an Economic Crisis<\/a><\/p>\n\n\n\n

Non-physical Gold<\/strong><\/h3>\n\n\n\n

1. Digital Gold<\/h4>\n\n\n\n

This method of gold investment is a\ncost-efficient way to partake in the form of online investment. It can be bought on various\nonline platforms that are often associated with gold traders and manufacturers.\nIt is found for as cheap as Rs. 1 and the gold can be used to make transactions\nat market price. One can choose to get the value of the gold in which you\ninvested or have it delivered physically. The digital investment, either way,\nis backed by physical gold. Digital gold can even be used for further\ninvestments. <\/p>\n\n\n\n

2. Gold Bonds<\/h4>\n\n\n\n

Sovereign gold bonds<\/a> were launched by the Government\u00a0 in 2015 and were created as another option instead of owning gold in the form of bars, coins or jewellery. This is an efficient and safe investment option as they have a lock-in period of five years with a term of eight years overall, providing fixed interest returns. While the bonds can only be redeemed for cash, they include no extra management fees, making them as safe and affordable\u00a0 an investment as one can ask for. <\/p>\n\n\n\n

3. Gold ETFs<\/h4>\n\n\n\n

A gold ETF is an exchange\ntraded fund  that invests in gold and is\ntraded on the stock market. While an ETF does not let you own any gold, it\nallows one exposure to the commodity\u2019s performance. Investing in a gold ETF is\nfairly cost-effective, and though one can expect charges such as management\nfees and brokerage charges these don\u2019t usually amount to much. <\/p>\n\n\n\n

4. Gold Fund of Funds (FOFs)<\/h4>\n\n\n\n

In the same vein, \u2018fund of funds\u2019 is a set of mutual funds that invest\nin other mutual funds. They are high-risk investments as they are more\nexpensive. They carry the charges for Gold ETFs since that is what is being\ninvested in and come with their own additional costs as well.
<\/p>\n\n\n\n

\"Benefits<\/figure>\n\n\n\n

Is it worth investing in Gold?<\/strong><\/h2>\n\n\n\n

Online investment in gold is a good way for\na beginner to invest as they each offer a variety of uses. These can be\nconsidered relatively safe\ninvestment options since they\noffer a fixed interest rate or are linked to the live commodity price and  offer the option of owning physical gold or\nreceiving monetary value. However, it is important to assess the method that\nyou choose,  keeping in mind the\nadditional expenses that may need to be considered. <\/p>\n\n\n\n

Additional Read:<\/strong> Why is everyone buying Gold?<\/a><\/p>\n\n\n\n

Conclusion<\/strong><\/h2>\n\n\n\n

Gold is a good investment opportunity to buy-in due to the stability of the product in an ever-changing market; It flourishes precisely when the wider market is struggling. However, before investing, you must very clearly lay out your expectations from the investment, namely, the amount of  risk you are looking for in the investment. Whether  you want to receive physical gold at the end of your investment (if investing in non-physical options) or not is another question to consider. <\/p>\n\n\n\n

The reason for investing differs from person to person, but if you\u2019re looking for accurate and customized guidance on how to secure and grow your finances during the pandemic, either through investing in a hedging mechanism such as gold, or other securities, TATA Capital\u2019s Wealth Management solutions<\/a> are perfect for you. Its team of expert Wealth Managers will help you find the investment strategy best suited to your long-term financial needs, and help you choose the right investments across a wide variety of investment options. <\/p>\n","protected":false},"excerpt":{"rendered":"

Gold investments are viewed as safe investment options during times of economic turmoil as the gold market tends to move in the opposite direction of equities. <\/p>\n

Read More<\/a><\/p>\n","protected":false},"author":1,"featured_media":11727,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[37],"tags":[],"class_list":["post-11724","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth-services"],"yoast_head":"\nDifferent Ways of Investing in Gold and their Uses - Tata Capital Blog<\/title>\n<meta name=\"description\" content=\"Read here to know about the different ways of investing in gold, both online and offline, along with their advantages and risks involved. 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