Digital Gold — the new gold. After the 2008 housing bubble and stock market failure, many lost trusts in paper gold and paper money. This got people interested in thinking about digital gold investments as an alternative form of investing without the fear of a major recession or financial collapse occurring. So before you start looking up today gold rate Cuddalore or Bangalore, to invest in physical gold why don’t you take a pause to understand the details of digital gold to see if it’s worth your investment.
So what exactly is digital gold?
Digital gold is the process of investing in gold digitally hence without actually owning physical gold.
You can invest in digital gold through any of the popular electronic wallets or by using the services of brokers. When you invest, depending on the amount you spend, your broker buys physical gold on your behalf and places it in a secured locker. You can later choose to take the physical gold or just sell it digitally without ever having to take the physical gold.
Digital Gold gives you the flexibility to buy and sell gold instantly at the click of a button or even before that! And, yes, you get physical delivery of your gold at your doorstep when you want it.
Gold prices are linked to international markets and are updated every few seconds. To verify this for yourself all you need to do is simply search gold rate today Pondicherry or any other city and keep a track of the prices and correlate it with the international market. This might also be a helpful exercise because you pay the real-time market rates for digital gold but with no hidden charges or making changes. The price transparency allows you to make an informed decision about buying and selling your holdings.
If you have ever tried to invest in physical gold, then you will know how complicated it is to buy, store and sell pure 24 karats Hallmarked jewellery because it doesn’t come cheap. With Digital Gold, you pay only for what you buy without any middlemen involved.
How digital gold compares to physical gold?
Digital gold is also a more flexible form of gold that can be used as a regular investment option. Apart from that, it comes with several other benefits:
- Portability and liquidity – You can buy digital gold from anywhere and sell anytime.
- Fractional ownership – You can purchase gold in fractions of 1 gm, 2 gm, 5 gm and 10 gm, instead of a kilo or more.
- Affordability – The low minimum amounts necessary to invest makes it easy on the pocket. To get started, you can invest as low as Rs 100/-.
- Instant access – Customers can buy/sell digital gold anytime they want. It is available 24X7 via online channels.
- No making charges – Unlike physical gold, purchasing digital gold does not incur any extra cost other than GST.
- Transparency – With physical gold, there is no way to verify the purity of the metal or whether you’re getting the right price for it at the time of purchase/sale. This issue doesn’t arise with digital gold.
When can digital gold be disadvantageous for you as an investor?
- When you invest in digital gold typically you can only invest up to Rs 2,00,000 as this is the limit on most platforms
- There is no distinct regulatory body like SEBI
- You may have to pay the delivery charges if you choose to not sell the digital gold and instead take the physical gold
- Often, the brokerage firm buying and selling on your behalf may have a limited storage period in which case you may have to sell in rush or accept physical gold or change brokers all of which require an investment of time and money on your behalf
