Sunday, January 24, 2010

Gold Investing Strategy

Being in south India, GOLD tops the list when it comes to special occasions, starting from birth, wedding, investment etc and the list is endless. ok coming back to the topic, why one should invest in gold, and what is the best way to invest

1. Gold ETF - Gold Exchange traded fund
2. Physical Gold Coins/Bars
a. Branded 24 or 22 carat
b. 24 or 22 carat from jewellers

Gold ETFs can be brought only when you hold a demat account, this can be done online through many agents, who charge a nominal brokerage. From investor perspective, who wants to invest little amount on regular basis and while selling does not need money immediately. When you hold ETF, selling will take couple of days for your money to be credited in your account.

Gold Coins/Bar is another option to invest, which does not require demat account or pan card. You can buy them from any bank or jewellers. Bank charges amount for its purity and seal, whereas jewellers charge 3%-4% as wastage, but its less than the amount charged by banks. Some jewellers offer Rs.40-Rs.60 less per gram, which adjusts for the 3%-4% wastage, so finally you buy gold for its actual price.

Simple investment strategy

Suppose 1gram gold Rs.1000
Wastage(4%) Rs.40
Total Rs.1040
Discount(Rs.40 less) Rs.40
Final Price(1gram) Rs.1000

Advantage in buying gold coin or bar from jeweller is you can exchange them for jewels, you can even get money back from them (ofcourse sell it to the same jeweller where you bought). Most advantageous is you get your money immediately morning, evening, night, weekdays, weekends anytime when jewellers are open :) Happy Investing in Gold


  1. the jeweler thing, i should have done that earlier, i even had the opportunity to, but anyway, thanks for the info :) i'm going to put it to use.


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