Physical gold purchased online and kept in a safe vault on the customer’s behalf is known as “digital gold.” Young investors and millennials who are risk averse have the ideal way to park their money in a flexible and liquid gold investment thanks to its accessibility through an expanding number of digital platforms. But the need of the hour is to remain aware of all aspects and equally know before investing in digital gold the variegated factors associated with it. The return of gold as a tactical investment asset has resulted from digital gold delivering on its promise. What a gold buyer in Delhi always focuses on is a pertinent question that you must know before investing in digital gold. We are covering many such crucial aspects in this tutorial blog.
Reasons for Gold Investments
Inflation-Protective Hedging: You can hedge against inflation by making gold investments. During periods of inflation, the price of gold tends to rise, which makes up for any losses you might have with your other assets—such as stocks, mutual funds, etc.—by increasing the value of your gold holdings. It substantially reduces losses and helps you diversify your investment portfolio. At least 5% of the investments in your portfolio should be made in gold. Also, you should know why gold prices are up 7% so far this year for a better idea.
Consistently Secure: You can support gold online with total security and dependability by purchasing digital gold, investing in Gold ETFs, or purchasing SGBs. It is so that the government may license the businesses that offer digital gold, the SEBI-regulated fund institutions that issue the Gold ETFs, and the RBI itself, which is the issuer of the SGBs.
Things to Remember Before Investing in Digital Gold
Acquire a Quality Assurance: Buyers must perform their due research before purchasing digital gold, including verifying the calibre of the actual gold that underpins their purchase. Most companies that sell digital gold only use 24K gold that has been independently verified for the highest purity.
Obtain a Tax Invoice: Its accessibility across various online channels is one of digital gold’s best features. However, it’s crucial to remember that these platforms, such as PhonePe, PayTM, AmazonPay, etc., are merely intermediaries between the vendor and the buyer and do not offer digital gold. The companies SafeGold, MMTC-PAMP India, Augmont, and others presently sell digital gold in India. A valid Tax Invoice is sent to the buyer by email from the seller or is made available for download in their digital gold account, and the customer’s buy/sell transactions are reflected in their history.
You are Allowed to Buy an Unlimited Amount of Digital Gold: Digital gold is available for purchase for as little as one rupee. However, there are no clearly defined upper limits, which is also noteworthy. Although similar to gold purchases from offline stores or jewellers, digital gold platforms may have additional Know Your Customer (KYC) requirements for purchases beyond Rs. 1.5 lakhs to Rs. 2 lakhs. You can find many gold buyers in Delhi at reasonable prices.
Be Mindful of the Purchase and Sale Pricing: Charge gold buyers a higher price than what is provided to sellers in such a sale, which is a frequent practice. The “spread” refers to the price differential between purchasing and selling. To offset the 1%–2% bank/credit card transaction fees, this spread, often 2–3%, is applied to digital gold. When customers sell back their gold, the 3% GST applied is lost because only firms with a VAT number are eligible to claim the GST.
No Single Authority for Digital Gold: The digital gold business is unregulated despite its explosive expansion. Potential buyers of digital gold must therefore perform due diligence before they invest. SEBI’s only intervention to date has been to forbid stock brokers from selling digital gold. There is a need for more structural guidelines.
To start on a successful investment path, however, any new investor in digital gold will only need to be aware of the considerations above. Not only gold, but you can also invest in cash for diamond jewellery options. It is undoubtedly one of the prudent options you should not miss growing your wealth.