Investing in Gold: How and When Should One Do it?
Since time immemorial, gold has been the most loved investment for Indians. Apart from the financial value, the yellow metal has an emotional value. As an investment option, gold never has disappointed investors. Barring a few cases when the gold prices dipped for a short time, the gold prices have always moved northwards. Even when the markets fall, gold has maintained its prices. A price drop, if any, is temporary, and the gold bounces back with a bang.
No wonder India is the largest importer of gold in the whole world. In July 2021 alone, India imported 74 tons of gold – a massive jump from July 2020, when it was 32 tons. In value terms, the imports jumped up to $4.2 billion from $1.78 billion. And these figures are even though the entire country is under the fear of the third wave of Covid.
Gold as a Wealth Preserver
The pandemic has instead witnessed a surge in gold demand. During this period of financial uncertainty, as always, gold has provided much-needed stability. This is because, unlike paper-denominated currencies, gold can be preserved for generations and easily transferred from one generation to another.
The things that potential investors look for in any investment are safety, liquidity, and returns. As gold meets our starting two criteria without any hiccups, gold has an inverse relation with equity investments when it comes to returns. So investing in gold is the best investment.
Gold as a Dividend-Paying Asset
Gold, as an investment, attracts people who look for growth and not regular income. Generally, the prices of gold have an impact on gold stocks. However, it is possible to make a profit for you with proper planning when the price is down. Even a slight rise in the price of gold can lead to significant gains.
In these uncertain times of pandemic, it’s difficult to predict anything. However, gold offers the investors a safe option that is independent of political and economic uncertainty.
Gold as a Safe Haven
History has witnessed the rise and fall of many empires, the collapse of currencies, political coups, and the recent pandemic resulting from coronavirus. There have been several instances when the world has witnessed political or economic uncertainties. During all such crises, investors who held gold for any reason were able to protect their wealth successfully. Whenever investors have any news or hint at some type of global economic uncertainty, they often choose to buy gold as a haven.
Safer Than Cryptocurrencies
In the times of Covid-19, one more investment has come to center stage, and that is investing in cryptocurrencies like Bitcoin. However, they are a relatively new asset class with few takers and a debatable intrinsic value. This makes cryptocurrencies susceptible to significant price fluctuations and speculation. Gold, on the other hand, is well-established, offers the liquidity, and is driven not only by investment demand but also consumer demand. That makes gold less volatile and more suitable to investors with a lower appetite for and volatility.
Different Ways of Owning Gold
Traditionally people have been buying gold in the physical form. This is done in various forms like coins, bullion, biscuits, or the form of jewelry, even mainly purchased for self-use or even offered to deities in the temple. However, with changing times, new ways of investing in gold have appeared on the scene. Some of the new forms of investing in gold are gold mutual funds, gold ETFs, sovereign gold bonds, and digital gold.
Digital gold is a 24 carat 99.9% pure gold investment without any physical storage. Companies store the physical gold in secured digital vaults, which relieves the investor of any uncertainties. The companies that offer these digital services to investors are certified by the government.
As the data suggests, the craze for gold has not changed over so many years. The only change has been in the manner; people are investing. Earlier, people used to invest in physical gold. Still, due to several issues like purity, security, and convenience, people opt for smart and convenient digital gold to avoid all the problems with physical gold.
How to Buy Gold with OroPocket?
Planning to invest in digital gold, then you must consider trading with OroPocket. It’s fast, transparent, and quite profitable. And to begin with, it’s pretty convenient and straightforward as well. You need to download OroPocket on your mobile, create a free account, complete your KYC, and you are good to go.
Benefits of Buying with OroPocket
Trading with OroPocket has several benefits. Some of these are listed below:
OroPocket allows even small investors to fulfill their desire of investing in gold by investing in fractional amounts, as low as Re. 1.
OroPocket allows investors to verify the integrity of their investment in an independent manner. For this, the company makes use of Blockchain technology.
OroPocket ensures a 1:1 physical backing of the assets. The company allows auditors to physically open and audit their digital vaults located in the UK, Switzerland, Singapore, and India; daily.
OroPocket ensures transparent dealings. There are no hidden charges or fees. The only thing charged to customers is a flat fee of 0.25% on all transactions.
OroPocket is open 24/7 for its customers. Whenever you have any queries, you can create a ticket, drop an email, or have an online chat.
Advantages of Investing in Digital Gold
Digital gold is the in-thing when it comes to investing. An investor can start investing with a small amount also. Investors may sell their investments anywhere and anytime. Unlike physical gold, digital gold does not require space for storage, as in the case of coins, ETFs, and Sovereign Gold Bond (SGB). Digital gold offers the opportunity of investing in gold without any hassle. In India, RBI issues some timelines for buying SGB from the government; however, you can buy or sell digital gold within a few minutes from anywhere.
Disadvantages of Investing in Digital Gold
There are a few challenges to investing in digital gold. Some companies charge customers various fees in the name of transaction costs, storage costs, and insurance costs, etc. Suppose an investor wants a physical delivery of gold investment; in that case, investors have to pay for making charges and delivery costs.
How to Invest in Digital Gold?
Investing in digital gold is more straightforward than investing in physical gold. Here is how anyone can do that.
- For investing in digital gold, one should have a Demat account. The account needs to be linked to that person’s Aadhar card, bank account, and PAN card.
2. Customer KYC is very critical. That can be quickly done through e-KYC or video KYC to make the process faster and smoother.
3. Now, decide the amount of investment you want to make. You may either invest by selecting the amount in INR or the quantity of gold in grams that you want to invest.
4. Once you have decided the investment amount, visit a reliable online platform, enter the amount, choose the payment options, and complete your investment in one go. The payment can be done through debit/ credit card, net banking, or e-wallet for digital gold.
5. Once the payment is made, then the trading company buys an equivalent amount of physical gold in your name and stores it safely in digital vaults for you.
6. You can check the gold performance and track the prices of gold on a real-time basis by simply using the mobile apps and websites of the trading company.
7. If required, the digital gold can be sold in the secondary market, i.e. the stock exchange, or maybe held till maturity and then redeemed the entire amount.
8. If you, an investor, want to convert digital gold into physical gold for any reason. The investor can take physical delivery of the gold. For a nominal amount, the gold can be delivered to the customer’s doorstep. Once the investor withdraws the investment, the gold is removed from the vault.
Expert Advice for Gold
Gold price may hit a new lifetime high by the end of 2021; gold price edged lower for the third straight session as INR continues to gain strength against the USD. Even commodity experts said that gold is most undervalued among the financial asset categories and could rise to its lifetime highs. Gold on MCX may cross its earlier high of Rs 56,191 due to the upcoming festive season in India.
The best time to invest for an investor in digital gold is now, due to the uncertainty of economic and political times. More and more people are moving from physical to digital investment in gold. Even OroPocket makes it safer and easier to invest in gold with meager investment. So, suppose you are looking for growing your investment safely and transparently; in that case, you must consider investing in digital gold with OroPocket.