What are the various ways in which one can invest in gold in India?

There are various ways in which you can invest in gold. Before you opt to buy the precious metal, you must know the pros and cons of each type.

Research proves that gold is one of the most popular forms of investment in India. The cultural significance of the metal also plays a significant role in its popularity. There are several ways to invest in gold and each has its own advantages and drawbacks. Here's a look at them:

There are several ways to invest in gold and each has its own advantages and drawbacks.

Physical gold

The most common and popular form of investment in gold is the physical form. This is the oldest and most trusted type of investment where gold is purchased by investors. It can be bought in the form of coins, bars and jewellery.

However, certain risks are associated with this form of investment. Storing physical gold at home increases chances of burglary and theft. If stored in bank lockers,one has to pay a certain fee for such a service. Moreover, one also has to pay additional labor cost if it is purchased in the form of jewellery.

Gold Exchange Traded Funds (ETFs)

Gold ETFs are a type of funds that invests your money in pure gold. This eradicates the need to buy and store physical gold  in order to benefit from its growth in value.The brokerage to be paid while buying a gold ETF is also very low. Besides, there many tax benefits of investing in this form of gold.

Gold funds and futures

Certain mutual funds invest your money in companies that are involved in gold-related businesses. Usually referred to as gold funds, this category of investment is independent of gold prices in the market, as the funds are usually invested in companies that mine, extract or fabricate gold.

Gold futures, like gold ETFs, invest your money in pure gold, but the investment is made only for a short term. This type of investment has also grown in popularity in recent years, but the short-term nature of the investment makes it a slightly more risky proposition than other forms of investment in the metal.


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