Gone are the days of buying physical gold as investment avenues. In a country like India, Gold is considered as most valuable metal and regarded as “God’s money”.
The same is being offered to the holy temple on all auspicious occasions be it a festival or gifted as a valuable ornament in Indian weddings.
Before we dive into whether digital gold is a good investment or not let’s understand what exactly is digital gold and how one can invest in it.
Due to pandemics, digital gold came into the picture as it was available in the market for a while. Most importantly Corona pandemic pushed the demand for digital gold for Indian buyers.
Not only people were hesitant to visit jewelry stores certainly digital gold was a perfect solution for gold buyers during a pandemic time.
They can buy gold from the comfort of the house without worrying about the deadly virus and the constraints involved in buying physical gold.
Digital gold is the online product in which a buyer can invest and hold the investment virtually without owning a safe or bank locker. On your behalf Seller will buy physical gold for the equivalent amount and store in an insured vault. Customers can invest any time anywhere digitally and with a minimum of Re.1 even.
One can invest in digital gold via e-wallet options such as phone pe, google pay & Paytm.
Few other players are also there to facilitate buying of gold digitally as MMTC -PAMP, Augmont gold ltd, and Digital gold Pvt ltd.
E-wallets only provide a platform for buying gold digitally via their intermediaries such SAFEGOLD and MMTC.
Is Digital Gold a Good Investment?
With regards to the physical buying of gold definitely digital gold has an edge as one does not have to worry about these factors:
|Does not have to own a safe or bank locker to keep this gold even though one takes the delivery of digital gold at your doorstep.
|Digital gold is genuine & 24k 99.5% pure from recognized sellers as Safe gold and MMTC.
|One can invest as low as Re.1 also that’s totally impossible in case of physical buy of gold.
|Collateral loans are also available against digital gold so it does provide a cushioning effect in your bad times.
In short as an advisor, I would not suggest to block your large sum of money in gold buying as it does not fetch any interest on the same.
Similarly for hedging purposes, one can include gold in your investment portfolio.
Then there are much better options available for gold investment likewise RBI SGBs or Gold ETFs.
Is it Safe to Invest in Digital Gold?
The gold one buys online is allocated as physical gold and stored within fully insured, certified vaults located on MMTC-PAMP’s highly secure locations.
It comes with 99.9% purity which can be sold at a market price. However, there is no regulating body like SEBI or RBI.
So in case something goes wrong with these marketplaces then grievance redressal may take time.
Also Read State Bank of India – Gold Coins Scheme