Dhanteras is considered an auspicious day to buy gold and silver in India. Many people buy jewellery, coins and silver utensils during the festival. Some also buy gold and silver as a way to invest their money.
However, there are different ways to invest in these precious metals.
How can you invest in gold?
The first option is to buy physical gold in any form such as jewellery, coins and bars. But jewellery can cost more than the actual price of gold. You also tend to pay making charges and GST. These extra costs may not be recovered when the jewellery is sold. This is why jewellery may not be the best option if your main aim is to invest.
Gold coins and bars are another choice. They allow you to own gold without buying jewellery. However, you should check the purity and price before buying.
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Another option is gold ETFs and gold mutual funds. Gold exchange-traded funds (ETFs) are bought and sold on the stock market. Their prices move with gold prices. On the other hand, gold mutual funds usually invest in gold ETFs. You can buy them through mutual fund platforms or fund houses without opening a demat account, unlike gold ETFs.
The third option is digital gold, which lets you buy gold online using payment apps and other platforms. The amount you buy is linked to physical gold held by the provider. The value of your investment changes with gold prices.
However, digital gold has some risks. It is not regulated as a security by the Securities and Exchange Board of India (SEBI) or as a deposit by the Reserve Bank of India (RBI).
Electronic Gold Receipts (EGRs) are another way to invest in gold without keeping it at home. These receipts represent a specific quantity and purity of gold. They can be bought and sold on stock exchanges. Investors can also convert EGRs into physical gold, subject to the applicable rules and delivery conditions.
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How can you invest in silver?
If you want to invest in silver without buying it physically, you can explore silver ETFs and silver mutual funds. These options allow you to invest in silver prices without storing the metal at home.
However, physical silver comes with purchase and storage costs. Market-linked investments also carry risks because silver prices can go up or down.
Which option should you choose this Dhanteras?
The right option depends on why you want to buy gold or silver. If you want jewellery to wear, physical gold may be a suitable choice. If you want to invest without storing gold at home, you can consider gold ETFs or mutual funds.
Also, gold and silver prices can rise or fall. No investment guarantees a profit, especially in the short term.
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