Everything You Need to Know Before Investing In Gold

Last Updated on May 21, 2021 by MoneyVisual

If you are willing to invest in metal like gold in India, You may have so many options. First and foremost let us discuss all the documents required before you start investing in gold. Tax liability and many more things you wanted to know about gold investments in India.

Documents Require to Investing in Gold

If you are investing in gold or willing to invest in any of the physical forms of gold like gold bars, jewelry, and gold coins than if it crosses the limit of rupees 2 lakhs, the very first document you need is PAN card. If you are wishing to invest in gold ETFs, you require to open an account with any of the brokerage firms in India as well as a Demat account.

How You Can Buy Real Gold, Sovereign Gold Bonds, and Gold ETFs

Buying physical gold in India is so simple you can buy from any jewelers shop but you require a PAN card in case if you are purchasing the gold with a value of 2 lakhs and above. If you are going to invest in gold we suggest you not purchase gold jewelry instead purchase gold coins.

Reasons we are suggesting you not to purchase gold jewelry because it has to make changes that cannot be recovered at the time of selling jewelry back.

Gold ETFs are the best options to buy if you want to invest in gold because you have not to worry about storage, theft, and gold ETFs can be sold easily. The best part of gold ETFs is it tracks gold prices. Jewelers keep their margin while selling gold jewelry.

To purchase gold ETFs you just need to tell your investing agent to buy it after successfully opening a brokering account. There are so many registered gold ETFs like VanEck Merk Gold Trust (OUNZ. OUNZ.) Goldman Sachs STFs etc. Buying sovereign gold is as simple as you buy listed shares.

Reasons to Purchase Gold ETFs and Sovereign Gold Bonds

If you buy a physical form of gold like jewelry, gold coins, etc. there may be a chance of theft but in the case of gold ETFs and sovereign gold bonds there is no chance for theft and you have not to worry about the storage.

There are some charges on gold jewelry like making charges and the same way gold ETFs have expense ratio but there are no charges on sovereign gold bonds. When you redeem you sovereign gold bonds you will not have to pay taxes and it gives you interest of 2.5 percent on semi-annually. Although gold ETFs have their own benefits but not as much as sovereign gold bond so we suggest the best is to invest in sovereign gold bonds instead of gold ETFs and physical gold.

You May Like to Read: Is E-Gold a Better Option for Investors than Gold ETFs

Why You Should Exactly Buy Gold

When you decided to invest in metals like gold there might be a question that why you should invest in gold. Let’s discuss that in detail why you should purchase gold consider that you have invested your all money in gold considering it as a dead investment. As we all know what happened in 2008 during the share market crisis, a gold rate almost doubled in 3 years and now three and halftime since 2008.

Accounting to analyst one should invest 10 percent of their money in gold by considering it as a dead investment.

What is the Different in 22 & 24 Carats Gold?

If you are new to gold investments, you must have to understate what is all about 22 & 24 carats gold. When we say 24 carats gold that means it is almost 100 (99.99) percent pure gold, while 22 carats gold is 91.6 percent pure which used to make jewelry.

While buying gold coins you must check that the coins are 24 carats gold. We have suggested earlier that gold ETFs and sovereigns are the best options if you are investing in gold your hard-earned money.

Factors that Affect Gold Prices in India

If you are new to investing in gold you must understand the factors that may affect the gold prices or influence the gold rate in India. Here are the few possible reasons for changes in the gold rate in India.

  • US Fed interest rates
  • Geopolitical tensions
  • Buying and selling demand in the global market
  • Rupees movement against the dollar

The Bottom Line

If you are up to invest in gold better do a market analysis and deep research before investing in gold and decide which form of gold can be best to invest in. There are many more options to invest in gold. Invest wisely in order to get benefits from the investment of your hard-earned money.