Digital Gold Price and its Relevance
Since time immemorial, people have been known to have a craze for gold. And Indians have always been the biggest consumers of gold. Over the years, a lot of things have changed. But what has not changed is Indians’ craze for the yellow metal. Change, if any, has been only in the way the gold is bought and stored. Earlier, people bought gold in the physical form. Still, now digital gold prices have taken their place as the preferred mode of investing in gold.
What is Digital Gold?
In simple terms, digital gold refers to the online purchase of gold, where the investor buys gold in virtual form. The trading company holds the gold in physical form and takes the responsibility of storing it safe and secure in digital vaults. This way, since investors are not holding the gold in physical form, they are saved from the cost associated with keeping the gold safely in their homes or bank lockers.
Digital Gold Price
People are moving to buy digital gold because of the assurance they get in terms of the purity and price of the gold they are buying. When it comes to the price of physical gold, the prices vary from city to city and state to state. However, in the case of digital gold prices remain the same across the country.
Digital Gold Price Chart Trend
Over the last 30 days, the digital gold price has not undergone much change. Though there has been a minor change in the price, the variation is negligible. But what causes rates of Digital Gold to fluctuate? While digital gold is different from physical gold, the factors that affect the price of digital gold are not very different from the factors that cause fluctuation in the price of physical gold. The various factors are:
The Limited Supply of Gold
The various gold mines located in different parts of the earth produce a fixed amount of gold per day. This makes the supply of gold more or less constant. However, the same is not true for the demand. There are several special days and festivals when buying gold is believed to be auspicious. This increased demand hikes up the gold price. Any change in the price of physical gold impacts the price of digital gold as well.
- Wedding Season: Barring a few months, India has a long wedding season. During this time, people purchase gold in the form of jewellery. So, there is more demand for gold jewellery, and digital gold’s demand falls down a bit.
- Change in Dollar-Rupee Exchange Rate: Internationally, gold is traded in US Dollars. The USD is treated as the global currency. So, whenever there is any fluctuation in the Dollar-Rupee exchange rates, it impacts the gold prices in India.
- Change in Bank Interest Rates: The price of gold has an inverse relationship with bank interest rate. When banks offer lower interest on savings, people tend to withdraw their savings and invest in gold to make better returns. This creates a higher demand for gold, and prices go up. The reverse happens when the banks hike the interest rate. People tend to hold their savings in bank deposits. This has an adverse effect on the demand and price of gold.
Best Platform to Buy Digital Gold
Digital gold is like any other commodity. There are various platforms to buy and sell digital gold. All platforms offer gold of the purest quality and provide the same price. However, the difference comes in the services and convenience offered to potential investors.
OroPocket, for example, allows investors to fulfill their desire to invest in gold with an amount as low as Re. 1. The entire process is very simple. One may just download the app, enter the quantity of gold or the amount to be invested, make the payment, and you are done. You are now a proud investor in gold through OroPocket.
Gold, for ages, has been very close to Indians. People buy gold as jewelry, to offer to gods, and even for investment. It’s considered a safe investment. However, nowadays, people prefer to buy digital gold compared to physical gold. Digital gold offers the assurance of price and purity, safety, and convenience while buying and selling.
1. Why are the buying price and selling price of digital gold different?
Ans: Like any other commodity which gets traded, gold too has a buy-sell spread. The buying price is higher than the selling price due to additional cost elements like bank charges and taxes.
2. Why is Digital Gold buying price higher than the selling price?
Ans: The buying price is higher than the selling price, as the buying price involves cost elements like storage, bank charges, taxes, among others.
3. Is it wise to invest in digital gold?
Ans: There are various options when it comes to investing in gold. One can buy physical gold, gold ETF, or digital gold. However, looking at the ease of investing, minimum investment required, and the safety of the investment, digital gold is the best option.
4. Why is digital gold better than physical gold for investing?
Ans: First, buying physical gold carries the risk of getting the right price and purity of gold. Then, there are costs and risks involved in storing physical gold at home or in bank lockers. On the other hand, buying digital gold is safe, convenient, and does not require huge investment. All these factors make digital gold a better investment option than physical gold.