Which gold investment option is best for you? Know it from the expert
If you are a trader or an investor in gold, then you must know the strategy to minimise your risks and earn good returns form it. The traders and investors have these 7 investment options before them for investing in gold. Know the advantages of these instruments along with the risk they carry
If you are a trader or an investor in gold, then you must know the strategy to minimise your risks and earn good returns form it. The traders and investors have these 7 investment options before them for investing in gold. Know the advantages of these instruments along with the risk they carry.
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Seven Investment options are:
- Gold Jewellery: This can be taken from the physical markets by visiting to a jewellers shop. The gains and risks are related to the price which may depreciate or appreciate on a day-to-day basis. There is also issues related to storing and securing it. It is not ideal for investing.
- Gold coins or Gold Bars: This also has to be stored and secured. The person holding it may also have to take lockers which is an additional cost.
- E-gold: You can also buy gold online. Now many banks and e-wallets are also giving this facility. The risks are on the pricing side, though there is no tension of physical storage or security.
- Sovereign Gold Bond: Commonly known as SGB is considered as one of the safest gold investment options. The RBI issues it so there is a sovereign guarantee on this. You also get a 2.5 per cent interest on this along with the benefits of price appreciation.
- Gold ETF: This instrument works like a Gold Mutual Fund. Its prices are linked with the markets.
- Gold Futures: This instrument is rewarding and has high risks associated with it. The strategy is to use certain hedging tools and trade with a strict stop loss.
- Gold Options: The last in the list is the Gold options category. If you are an options buyers, you can earn handsome returns by paying a premium. The returns are fixed and the downside risks are also not as high as Gold Futures.
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Zee Business expert Bhargava Vaidya of BN Vaidya and Associates said that SGBs according to him for the best in the lot. The investor gains on buying or selling. It also has tax benefits associated with it. But SGB’s has a limit of 4 kg. For individuals it could be a good option, Companies cannot buy it and can invest in Gold ETFs.
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