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Gold breeds gold: The low-down on gold investments in India

. 5 min read . Written by Vanshika Goenka
Gold breeds gold: The low-down on gold investments in India

People say that diamonds are a girl's best friend, but conveniently forget about the relationship women have always had with gold. For us desi ladies and gentlemen, gold is an important guest at all our ceremonies, and a companion during our biggest moments.

Why not take this very same relationship and strengthen it further? Turn all those thoughts of investing in gold into action, and reap its benefits with a little help from this article.

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It isn't uncommon to stumble upon conversations wherein a relative is flaunting their investment plans and expensive jewellery, only so that they can get around to knowing what you’re up to. With these investment tips, give them a come-back to all their snarky remarks and understand why investing in gold is just the right thing to do.


  • How to invest in gold in India?
  • Why should you invest in gold? 4 tips that will help you
  1. ETFs are some of the best forms of gold investments
  2. Choose your fund manager wisely
  3. Owning jewellery can be more than just an investment
  4. Decide the duration of your investment

How to invest in gold in India?

‘How to’ articles are a saving guide for millennials today and this one should be no different. The best part about investing in gold is that it isn’t restricted to physical gold. As astonishing as this may sound, you can also invest in gold by buying stocks in gold mining companies, investing in gold ETFs, and gold mutual funds.

A gold exchange traded fund (ETF) is one unit backed by a gram of physical gold, based on actual gold prices. ETFs and mutual funds can be managed by professional investors, whereas you can invest in gold mining stocks using your brokerage account.

When it comes to physical gold, you can invest in gold bullion, jewellery and gold coins, which can be bought from authorised dealers. You will have to pay for the storage of your gold and will require insurance for the same.

Bullions are available in bars and are usually expensive, while coins are smaller in sizes. When buying these, it is very important to check the value and purity of the gold used in the ornament. Remember, all that glitters isn’t gold.

Why should you invest in gold?

The question really should be, why shouldn’t you invest in gold?

Since aeons, gold has stood the test of time, inflation and a number of other calamities. This helps you diversify your portfolio because its value doesn't fluctuate continuously. From selling at Rs. 4400 per 10 grams in the year 2000, to Rs. 52,670 today, the prices have seen a continuous rise (Source: BankBazaar).

Gold itself has several investment options under its umbrella—

  • Options that focus on investing in physical assets
  • Bullion
  • Gold coins
  • Jewellery
  • Options for a better ‘return on investment’ factor
  • ETFs
  • Mutual funds
  • Gold futures
  • Stocks in gold mining companies

Coming to the red letter word 'risk', well any investment involves a certain risk and gold is no exception. However it is considered to be one of the more stable forms of investment. In the long run, Gold has always stood the test of time, inflation and other calamities. It helps you diversify your portfolio and doesn’t fluctuate continuously.

Risk accompanies all forms of investments and gold is no exception. Even under gold, you have several investment options that you can choose from depending on how risk averse you are.

Here are a few tips that will help you make a better choice:

  1. ETFs are some of the best forms of gold investments

For those who invest on a regular basis, experts suggest that they should invest not more than 10-15 percent of their portfolio in gold, mostly ETFs (Source: LiveMint). Since ETFs are not available in the physical format, each gram represents 99.5 percent of pure gold. They yield huge profits and are ideal for long term investments. If you intend to indulge in regular trading, ETFs are a wonderful option for you. The best part however is that there is no VAT, wealth tax or securities transaction tax on ETFs.

2. Choose your fund manager wisely

The wrong choices can lead you down a whole new road. Investing, especially investing in gold, is a decision made based on a series of choices and preferences. When choosing a fund manager, take a look at the performance of their previous funds so that you can analyse how well they will handle your account. Keep monitoring your funds, trades and the market, it’s always good to know what you’re getting yourself into. All of this will help the performance of your portfolio.

3. Decide the duration of your investment

You can yield the benefits of gold depending on how long you decide to invest in it. Time frame in gold is extremely crucial—making it an important factor while deciding whether you want to invest in mutual funds and ETFs or physical forms of gold. Physical assets make excellent long-term investments while ETFs, mutual funds or stocks in gold mining companies are better options for short-term investments.

Before investing, do a thorough research on the benefits of investing in gold. Check your current portfolio and requirements and only then take on the next step. Whether investing in gold is good or bad depends largely on the duration of your investments and your personal financial goals. Tracking down your budget can be a daunting task, and deciding which investment options to choose can be excruciating, but we are sure that your future self will love you for making these choices today.

If you’re still seeking some guidance for your finances, you can always sign up for our course, Finance Pass: Personal Finance Made Easy. Learn from a number of experts and #RaiseYourPower with PowerPass.

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