Gold ETFs score over physical gold. Here’s why
Indians mostly prefer buying physical gold, but over the years there’s been a prominent shift in consumer habit
The gold prices have dropped more than Rs 10,000 to around Rs 45,000 from the August highs, making a compelling case for those who are looking to buy the yellow metal. Gold investments are not just limited to buying physical gold, as there are other ways also to invest.
If you buy physical gold you have to pay minting charges, making charges and 3% GST over and above the market price of gold. This leads to a price variation when you go market.
Kirtan Shah of SRE Wealth believes, if you are buying gold for wedding or gifting or on a festive occasion, physical gold would make sense, but if you want to invest, you may consider Gold ETFs or Sovereign Gold Bonds (SGB). In ETFs you buy gold at market value and in SGB you buy bonds at a discount from the market price. The buyer doesn’t have bear any GST or storage charge.
Gold ETFs are catching up
Indians mostly prefer buying physical gold, but over the years there’s been a prominent shift in consumer habit. Sample this: Investments in gold ETFs stood at Rs 6,657 crore in 2020 versus Rs 16 crore in 2019, according to Association of Mutual Funds of India data. You can start investing in gold ETFs with as low as Rs 50.
Kirtan Shah of SRE Wealth also believes that if you are planning to invest in gold then ETFs is one emerging asset which should be on your radar. Full conversation in this video:
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