Is gold investment a smart choice or not? Here’s the guide

Gold is considered a great way to diversify the portfolio and balance market risk. When the stock market falls, gold prices usually see a rise.

New Delhi: Gold has long been a symbol of security and stability for Indian investors. It is not only known to increase in value during times of inflation, but also acts as a safe haven during market volatility. But in today's digital age, investing in gold is not limited to just buying and keeping it. Now you can also invest in gold through online and digital means, that too without any storage worries.

Why To Invest In Gold

Gold is considered a great way to diversify the portfolio and balance market risk. When the stock market falls, gold prices usually see a rise. This is why investors turn to gold during economic uncertainty or geopolitical tensions. Its high liquidity and global recognition make it quickly convertible into cash.

Online Gold Investment Options

Today, there are many digital options for investing in gold.

Gold ETF (Exchange Traded Funds): These are funds traded on the stock exchange, which track gold prices. To invest in them, a trading and demat account is required.

Sovereign Gold Bond (SGB): These bonds issued by the government have a tenure of 8 years and also pay 2.5% annual interest. There is also no tax on capital gains on these.

Digital Gold: Through platforms such as PhonePe, Paytm, Google Pay, you can invest in gold even in small amounts. It is stored in a secure locker with 99.9% purity.

Gold Commodity Trading (Futures and Options): If you have trading experience, you can invest in gold derivatives through Multi Commodity Exchange (MCX).

Futures And Options In Gold

In futures contracts, you deal to buy or sell gold at a fixed date and price. On the other hand, gold options give you the right, but not the obligation, to buy or sell gold at a fixed price by a future date. Options are considered less risky and offer more flexibility.

How To Do Online Gold Trading?

• Choose a recognized commodity broker.
• Open a trading and demat account.
• Choose a gold contract listed on an exchange like MCX.
• Decide the lot size based on your risk appetite and capital.
• Analyze the market before trading, then place orders in futures or options.
• Manage your deal according to market movements.

Benefits

• Helps in portfolio diversification
• Protection from inflation and currency volatility
• Possibility of high returns in low margins
• No need for physical storage
• Facility of quick entry and exit in the market

However, it is important to understand that gold prices are affected by international demand and supply. Therefore, proper research and risk assessment is necessary before investing.