Today, on 25 September, gold has crossed Rs 75,000 per 10 grams for the first time and has reached an all-time high. According to IBJA, the price of gold has increased by Rs 11,908 so far this year. On January 1, gold was at Rs 63,352, which has now reached Rs 75,260 per 10 grams.
According to Mahendra Lunia, chairman of Vighnaharta Gold, the price of gold can reach Rs 1.68 lakh per 10 grams by 2030. If you are also planning to invest in gold, then investing in Gold Exchange Traded Funds i.e. Gold ETFs can be a good option. It has given a return of up to 26% in the last 1 year. In such a situation, here we are telling you about Gold ETF…
ETFs are based on the rising and falling prices of gold
Exchange traded funds are based on the rising and falling prices of gold. One gold ETF unit means 1 gram of gold. That too completely pure. Gold ETFs can be bought and sold on BSE and NSE just like shares. However, you do not get gold in it. When you want to withdraw it, you will get money equal to the price of gold at that time.
5 benefits of investing in gold ETFs
- You can also buy gold in small quantities: Gold is bought in units through ETF, where one unit is of one gram. This makes it easy to buy gold in small quantities or through SIP (Systematic Investment Plan). On the other hand, physical gold is usually sold at the rate of tola (10 grams). Sometimes it is not possible to buy gold in small quantities when buying from a jeweler.
- You get pure gold: The price of Gold ETF is transparent and uniform. It follows the London Bullion Market Association, which is the global authority for precious metals. On the other hand, different sellers/jewellers can offer physical gold at different prices. Gold purchased from Gold ETF is guaranteed to be 99.5% pure, which is the highest level of purity. The price of the gold you buy will be based on this purity.
- There is no jewellery making cost: Buying gold ETFs costs a brokerage of 1% or less, plus a 1% annual portfolio management charge. This is nothing compared to the 8 to 30% making charges that you have to pay to jewellers and banks, whether you buy coins or bars.
- Gold remains safe: Electronic gold is kept in a demat account, in which only annual demat charges have to be paid. Also, there is no fear of theft. On the other hand, in case of physical gold, apart from the risk of theft, one has to spend on its security as well.
- Ease of trading: Gold ETFs can be bought and sold instantly without any hassle. Gold ETFs can also be used as security to avail a loan.
How can you invest in this?
To buy Gold ETF, you have to open a demat account through your broker. In this, you can buy units of Gold ETF available on NSE and the equivalent amount will be deducted from the bank account linked to your demat account. Gold ETFs are deposited in your account two days after placing the order in your demat account. Gold ETFs are sold through the trading account only.
Limited investment in gold is beneficial
According to experts, even if you like investing in gold, you should invest in it in a limited amount. Only 10 to 15% of the total portfolio should be invested in gold. Investing in gold can provide stability to your portfolio during a crisis, but in the long term it can reduce the returns of your portfolio.
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