This is a partnered post in association with Moneycontrol.
The short answer is: yes! Gold is one of the world’s earliest forms of currency, and now there are many ways to use the precious metal as an investment product.
India is one of the world’s largest markets for gold, as the precious metal has always been revered and considered auspicious. A symbol of affluence and prosperity, gold is deeply entrenched in India’s cultural heritage. While the gold market briefly plunged at the start of the year with the imposed lockdown, the demand for gold has seen an upswing across the globe since the onset of the pandemic. And it is expected to pick up with the festive and wedding season as gold demand is likely to play an integral part in India’s economic revival.
Since gold has always been a reliable ally during financial hardships and is less volatile as an asset, gold is considered a low-risk, safe investment option—especially during uncertain times—as compared to other investments such as stocks. For gold to be purchased for investment purposes, there is no right or wrong time. Experts believe that every investor should have some gold in their portfolio. Gold consumption is primarily driven by need, be it weddings or religious functions, but seeing how global economies have come to a standstill this year, it is even more imperative to enter this asset class now and add gold to your investment profile.
Factors to keep in mind while buying gold
From buying a gold coin or bar to digital gold online, there are numerous ways to make an investment in gold. Experts recommend an ideal allocation of 10 percent, which should be increased to 15 percent during the current economic climate. Before making a purchase, it’s important to know what options are available and what factors to bear in mind in making a selection.
Purity of gold
Generally is denoted in carat (K), gold is available in different levels of purity; from 14K to 24K. The purity level you select directly impacts the price of your purchase. While 24K is considered the purest form of gold, it’s not suitable to make jewellery and hence it’s mixed with an alloy. This is why most gold jewellery comes in the form of 18K (75 percent gold), or 22K gold (92 percent gold). So make your choice based on your requirement.
Just like any other investment, it’s crucial to have a certificate to ensure you have proof of ownership of the gold you have bought. In India, the certification is issued by BIS (Bureau of Indian Standards) so check to see if your purchase has a BIS hallmark.
Buying physical gold
Before the pandemic hit and stringent lockdown measures came into play, buying gold (coins, bars, jewellery) physically from stores was the norm. In addition, when you bought physical gold, you also had to account for a storage space which usually came in the form of bank lockers that provided safety and security. But seeing the current scenario, investing in digital gold has become a preferred option as it provides safety and convenience to purchase this metal from the comfort of your home.
Owing to the extended lockdown and slow economic recovery, digital gold investment has rapidly gained prominence. Being one of the better performing asset class this year with low risk and high returns, buying gold online is the fastest and safest way to buy and store gold. It provides transparency, storage in digital vaults and encourages good governance.
Where to buy gold online
One of the most comprehensive digital financial service platforms, Freecharge recently launched their digital gold offering in collaboration with SafeGold. With this offering, investors can not only instantly purchase gold online, they can also determine the value they want to invest in and start at a mere low price of Rs 100. So even if you’re a first-time investor or cautious about digital investing, this is a great place to start your online investment journey.
They offer e-gold in 24K (which is 99.5 percent pure gold) that is stored in world-class 100 percent insured lockers. If and when you decide to sell your gold, you can easily do so online and have the money transferred into your bank account. You can also redeem e-gold for physical gold (as jewellery or gold coins) as per the gold rates at that time from partner jewellers, as and when the need arises.