How to Invest in Gold?

India is one of the largest gold markers, and the young country’s growing affluence is further driving growth in demand. For eons, gold has played a central role in the country’s culture. It is considered a store of value, a symbol of wealth and status, and a vital part of many rituals.

In India, gold is treated as ‘God’s Currency’ and is believed to possess the power to purify anything it touches. This is one of the main reasons; many god idols in temples are made of gold and many devotees offer gold to deities in the temples.

In addition to religious festivals in the country, gold is central to various personal life events too. Due to its sheer value, gifting gold is a deeply ingrained part of the Indian culture. Gold has duality like no other- it celebrates wealth, as well as acts as an umbrella for a rainy day ahead. 

Investing in Gold

Gold as an investment is one of the preferred options for Indians. Since pre-historic times, people have invested in gold in various forms. Even experts recommend a portfolio that has about 10-15% gold investment.

There are several reasons why you should consider investing in gold. Some of the reasons are listed below:

Historical growth of gold 

According to a study conducted by Bank Bazaar, if one were to oversee the historical data of gold prices over the last 50 years, they would get a clear idea of why are we saying gold is one of the best investments.

In the year 1971, gold was priced at Rs. 193 for 10 grams. With constant growth, in the year 2021, gold has reached a price of about Rs. 49,000 for the same quantity of gold. 

There have only been 2 phases when the gold showed negative growth. The first was during 1996 and 1998 and the other was during 2012 to 2015. On the other hand, between 2019 and 2020, the gold prices have gone up from Rs. 35,220 to Rs. 48,650, which is a growth of 38% in just a year. 

This data clearly shows that in the long run, gold has always given more than average returns to investors. There are not too many assets that have given that kind of return.

Gold is stronger than currency 

When a country is undergoing higher inflation, the investors tend to buy large quantities of gold. Since gold cannot be diluted, it is able to retain a better value as compared to the currency. Hence, gold is better than many currencies. 

Hedge against inflation 

The biggest reason for people to invest in gold is that it provides them with a hedge against inflation. When an economy is experiencing a higher rate of inflation, people tend to buy more gold. 

Since the supply is limited, the prices go up due to increased demand. Over a long period of time, the rise in gold prices has been higher than inflation. Owing to this inherent quality, gold provides a hedge against inflation. 

Deflation protection

Contrary to popular belief, gold acts as a hedge not only against inflation but also against deflation. Gold is a safe investment option even during deflation as well.

Gold as a wealth preserver 

For people who have irregular income, gold is a good wealth preserver. They are people who get a huge income but at irregular intervals. So, to get a regular income, they invest in gold which helps them preserve their wealth.

Gold as a crisis commodity

Whenever there is any uncertainty due to geopolitical reasons, and there is a lack of confidence in the government or markets, people invest their savings in gold. Other investments like paper assets are badly affected but gold does not lose its shine. Hence, it is treated as a crisis commodity.

Ways to Invest in Gold 

When it comes to traditional ways of investing in gold, there are various options available. One can look into buying physical gold in the form of coins, biscuits, bars, or bullions. Some people buy gold jewelry as well, but that’s more for personal use, rather than investment. With the evolution of time, some more ways of gold investment appeared. They are Sovereign gold bonds, Gold mutual funds, and Gold ETFs. 

The Boom of Digital Gold

In the last few years, one more form of investing in gold has appeared – digital gold. This became very popular during the Covid-19 pandemic. With many governments putting restrictions on holding physical gold and several other reasons, people are moving to invest their hard-earned money in the digital hold. The outbreak of the Covid pandemic and the resulting pandemic has also worked in its favor. With people following the security protocols, they are avoiding buying physical gold. Due to this reason, the sale of digital gold doubled up in the last 6 months of the year 2020. One single player claims to have sold 5000 kg of gold to about 75 million customers.

Pros and Cons of Buying Digital Gold

There are various reasons, why it is better to buy digital gold compared to physical gold. Some of the reasons are listed below:

1. While buying digital gold, the investor is assured of the price and purity. 

2. There is no need to worry about storing it safely, as the companies, trading in digital gold, keep it safe in digital vaults, for which they don’t charge anything. 

3. The investors can make small investments in the case of digital gold, as low as Rs. 100.

4. The entire process of buying digital gold is very easy and transparent. The investor can track its performance on trading websites or mobile apps and buy or sell at an appropriate time. 

However, there is one flip side to investing in digital gold. It does not offer any passive income or instant returns. Its value grows over a period of time and one can make money only by selling digital gold.

How to Buy Gold with OroPocket?

Buying digital gold with OroPocket is very simple. One just needs to download the OroPocket app and make a free account. After this, the person needs to upload the KYC documents. Once the KYC is approved, the person is ready to invest.

Benefits of Buying Gold with OroPocket

Among the various trading platforms, OroPocket is the leading platform dealing in digital gold. It allows customers to invest in digital gold with an amount of Rs 1. In addition, there are no charges like storage fees or insurance charges for keeping the gold in a digital vault. The gold is stored securely in digital vaults in UK, Switzerland, Singapore, and India. OroPocket makes use of Blockchain technology to allow investors to independently verify the integrity of their holdings. In addition, there is a team of independent auditors, which audits the gold on a daily basis to ensure a 1:1 physical backing of the investment. All these things make OroPocket a smart choice for investing in digital gold.

Conclusion

Since pre-historic times, Indians have displayed a passion for buying and investing in gold. This is because gold offers several benefits which not many investment options offer. Over a long period of time, gold has always given handsome returns and acts as a hedge to beat inflation and support people in times of crisis.

However, in recent times, people have shown interest in buying digital gold, as it is much easier, safe, and offers better returns. Among the various platforms, OroPocket offers investors a lot of conveniences, safety, and better returns. It allows investors to invest in multiple categories with an amount as low as Rs 1.

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