Digital Gold adds to the lustre of the yellow metal, a must in your portfolio!

According to astrology as well as the tradition, if one invests in gold on this day he is besieged with an abundance of prosperity and wealth.

May 11, 2021 01:05 IST India Infoline News Service Sandeep Bhardwaj |

Over thousands of years, gold has maintained its allure as a commodity or as a currency and it is no surprise that it still retains its appeal as an investment asset. Gold has been used as a portfolio diversifier in modern times to hedge against inflation, geo-political and economic risks. In the last one year, gold has given a return of more than 20 per cent.

However, this year’s Akshaya Tritiya may not give the Indians the opportunity to buy gold physically because of the ongoing pandemic which has resulted in lockdowns and restrictions all over the country.

Indians buy gold on Akshaya Tritiya to bring prosperity and good luck. The word Akshaya depicts never diminishing or never ending and hence gold is considered to be one such material existence which will never diminish. According to astrology as well as the tradition, if one invests in gold on this day he is besieged with an abundance of prosperity and wealth.

Akshaya Tritiya 2021 may not be the usual one. Due to the uncertainty looming all over, Indians might not be able to spend more on gold this year. However, they would not like to break the age -old tradition and the sentiment of positivity associated with Akshaya Tritiya too. For these Indians who want to purchase gold, there are ways and means to invest in gold this Akshaya Tritiya without investing more or stepping out of the home to buy gold physically.

Primarily, there are two ways one can buy gold this Akshaya Tritiya – one through gold exchange traded funds (ETFs) and other through digital route, which in the investment parlance is popularly known as digital gold.

Gold Exchange Traded Fund (ETF) is a kind of investment fund that is traded on exchanges and money collected from all investors is invested in gold. These funds are passively managed, and they ensure good returns quite close to the returns from physical gold. ETFs offer the option of investing in gold without holding physical bullion. It is like an open-ended mutual fund whose units represent physical gold that is 99.5% pure, with each unit representing 1 gram of gold. At the prevailing market rate, the investment will be around Rs 4,700 for a gram of gold.

Since the gold is held in the electronic form, questions on the purity of the metal do not crop up and there is no risk of theft and no worry about the storage cost. Gold can be purchased in small quantities which provides an opportunity to investors to accumulate gold over a longer period as per their financial goals. They are traded on exchanges and hence gold ETFs can be bought/sold at transparent prices across India.

Gold ETFs had witnessed a tremendous rush in India in the financial year ending March 31, 2021. Heightened risk and uncertainty sparked by the Covid-19 pandemic elicited investors to rush to gold as safe haven as they infused over Rs 6,918 crore in gold exchange-traded funds (ETFs) in 2020-21, more than four times from the preceding fiscal.

Like gold ETFs, digital gold is another before the Indians this Akshaya Tritiya to purchase the precious metal, which acts as a hedge during the time of inflation. Digital gold can be bought online and is stored in insured vaults by the seller on behalf of the customer. All you require is Internet/mobile banking and you can invest in gold digitally anytime, anywhere.

Currently, there are three companies that offer digital gold in India-Augmont Gold, MMTC-PAMP India and Digital Gold India with its SafeGold brand.

Once you invest in digital gold, these trading companies purchase an equivalent amount of physical gold and store it under your name in secured vaults. You can exchange digital gold for physical jewellery or gold coins and bullion. One can invest as low as Re1 to buy digital gold. Digital gold can be used as collateral for online loans as well.

To buy Digital Gold with IIFL Securities Click

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