A Beginner’s Guide to Investing in Gold: How to Get Started with Gold Investments

Date of Published: September 13, 2023

Gold is one of the most precious metals with great investment potential symbolising wealth and power. Investing in gold is considered the best and safest investment for a  majority of people. Many investors have shifted to gold because of its safety  and  long-term store of value that it provides during the uncertain economic conditions. 

Investing in gold is a wise decision from every aspect. However, before investing in gold, it’s important to understand the basics of this precious metal and how to get started with gold investment.

Let’s dive into all the key aspects of gold investment and uncover all the juicy details!

Why invest in gold?

Here are some benefits of investing in gold:-

1. Diversification – Gold has a low correlation with traditional investment options like stocks, bonds, etc. That’s why it’s an effective tool for diversification to reduce potential risk.
2. Hedge against inflation – Gold values increase in parallel with the overall price increment of goods. This is due to the fact that gold’s supply is so limited and gold owners can better maintain their purchasing power.
3. Global Acceptance – Gold is an easily traded investment with a wide range of buyers and sellers worldwide because of its high liquidity and recognition.
4. Loan against gold – In any emergency, one can take a loan against gold easily.
5. Liquidity – Gold has a high liquidity feature. We can buy and sell it in a very short period of time as there is enough demand and supply in the market.
6. Store of Value – As time passes, gold prices also move forward. Store of value means the increase in value of your money adjusted for inflation.

How to invest in Gold?

While there are multiple ways of investing in gold, we will primarily categorize it into physical gold and digital gold.

Physical Gold

It includes the trading of gold coins, gold jewellery and gold bars. You can keep the physical gold with you. Anyone can purchase it from a trusted goldsmith or branded stores.

Digital Gold

It includes trading of gold in fractions through the digital mode. We can’t keep the digital gold with ourselves. But your purchase is backed by the 24k gold at the real-time gold price. Interestingly, you can invest even as low as Rs.10. Let’s see how!

There are four ways to invest in digital gold:-

1. Sovereign Gold Bond (SGB)

The central bank of India (RBI) issues SGB every year. It is one of the safest ways of investing in gold. It gives 2.50% interest per annum and it has 8 years of the lock-in period. It is a good alternative to investing in gold coins.

2. Gold Mutual Funds

Gold MFs are the same as Stock MFs. They pool investors’ funds to invest in gold reserves either directly or indirectly. 

3. Investment in Gold ETFs

Gold ETFs are investment funds that trade on stock exchanges and track the price of gold. They provide investors with indirect ownership of physical gold without the need for storage.

4. Gold Futures and Options

Gold futures contracts allow investors to speculate on the future prices of gold. This option requires higher knowledge and risk tolerance.

5. Gold Mining Companies Stock

Investors can invest in gold mining companies to participate in the gold industry indirectly. It is a combination of gold investment and traditional stock investment.

Make sure to check all the pros and cons of the above option before investing.

Some tips before investing in gold

1. Educate yourself about the gold investment before investing.
2. Haveclear investment goals by taking every aspect into consideration. 
3. Evaluate your risk tolerance level and determine how much gold you want to add to your portfolio.
4. Choose the best investment option based on your preference and needs.
5. If you are investing in physical gold then make sure to keep it safe.

Conclusion

Investing in gold is a great idea but if you are in the market to release your pledged gold, repay your gold loans, obtain cash for your gold, or sell your gold, then Value gold is your best bet. Valuegold focuses on ethical practices, seamless experiences, and ensures adequate safety and security of your transactions. It is the best place for you to maximise your satisfaction when it comes to transacting in gold.