There was a time when gold started to lose its identity in the niche market. Thousands of people were caught in the vicious economic downfall of the world by the COVID-19 pandemic. This leads to people thinking about investing. About 70% of people invest in gold every year in form of jewelry. Investors can invest in gold directly while having three choices:
- An investor can purchase gold as a physical asset
- An investor can purchase shares of an ETF Mutual fund which replicates the price of gold.
- Investors can trade in commodities markets.
It is important to stay informed while investing in gold. Information like its past performance, market demand, intrinsic value, etc. helps investors to invest mindfully.
Is It a Good Idea To Invest Now In Gold?
In the uncertain times of pandemic, it is rather prudent to keep aside some amount of money that can be invested as an emergency fund. Gold acts like your emergency fund which has the present market value even if you’re selling 10 to 15 years old gold items.
- With a steady flow of income and emergency funds stashed; one can start investing in gold.
- During the pandemic, the market goes down. It means the price of gold also dips which makes it easier to invest in gold. Hence more chances of profits in the future.
- Investing in gold has become a booming Alternate investment.
5 Ways to Invest In Gold
Mentioned below are the five different ways to invest in gold:
- Physical Gold- Investors can find all the polities in gold to make it into an asset. One way of investing in gold is purchasing it in its physical form. Gold jewelry, gold coins are a few examples. Nowadays physical gold can be purchased online and offline both ways. Some non-banking finance companies, eCommerce sites, and government also provide gold in its physical form.
- ETFs (Exchange Traded Funds)- ETFs do not involve high initial buying costs, insurance, and selling costs. Using a trading account with an online stockbroker and a Demat account, investors can invest in these mutual funds.
- Investing in GAP (Gold Accumulation Plans)- Investors can purchase gold from online sites using credit cards and debit cards. It is called digital gold which can be redeemed and can be sold to vendors directly.
- Investing in SGB (Sovereign Gold Bonds)- Gold Bonds is paper gold and every investor can get a maximum of 4kg gold bond. Each gold bond sells as per unit. 1unit is equal to 1gm of gold.
- Investing in gold futures- By speculating on the price of gold in the future, investors can make profits on gold purchases. If the gold prices move in the expected direction; investors can make a lot of money.
Conclusion
Gold investments are the future as it gives good returns, liquidity, and low correlation with the other assets available in the market. Investors have started investing in gold mostly during the pandemic as it is the most reliable asset. Due to coronavirus, more people are sitting at home in the comfort of their house making them free to access information about gold investment in detail. Gold tends to go up when other investments decline. Hence, making it more sustainable and investment-worthy.