Gold prices are falling: Is it good time to invest in digital gold?

• Follow

Gold rates are heading south. Currently, gold is hovering near the Rs 46,000-mark, down Rs 10,000 from the August 2020 peak. There are many reasons for the decline in gold price in India ranging from import duty cut announced in the budget to the appreciation of the rupee against the US dollar.

With the gold prices expected to go down further, experts say it is considered to be good time to invest in gold. And the best way to buy gold is through online channels over the traditional ways of buying gold.

A report by the World Gold Council states that the demand for the yellow metal as an investment has increased, indicating that Indian investors have started preferring traditional jewellery over digital gold. Moreover, there are many concerns on buying physical gold such as the purity, high making charges and above all storage, considering the high cost of bank lockers.  This makes digital gold a preferred way of investing in gold. So, if you want to invest in paper gold, you can consider Sovereign Gold Bonds (SGBs), gold exchange traded funds, gold funds and digital gold sold by wallets. Money9 spoke to Tapan Patel, senior research analyst of HDFC Securities to know how to invest in virtual gold.

Gold is considered a safe haven asset and is proved useful during a crisis. Further, the performance of gold is inversely related to equity, which makes it an ideal asset for adding diversification to your portfolio.