Different Ways to Invest in Gold in India

  • Gold bullion - Refiners produce gold bars from one gram to different weights.
  • Gold coins - These days banks like ICICI Bank, Bank of India and other major banks sells gold coins. Remember, PAN card needed if you are buying gold coins worth more than Rs.50,000: If you plan to buy gold coins worth more than Rs.50,000 then the bank will ask you for your PAN details. You should also remember that Banks won’t buy back your gold coin. They come in different sizes. Gold coins are available in different sizes, so you can buy the ones that suits your needs the most. The usual sizes are coins of 2, 4, 5, 8, 10, 20 and 50 grams. The coins are 24 carats, and the banks guarantee their purity too. One more thing you have to keep in mind is there will be a considerable difference when you compare prices between your local jeweler and some banks, even when they guarantee the same purity. A lot of people think that this premium is worth it because the price is higher when you go to sell the gold, but that is not always true. You are not goign to get this premium price back when you are trying to sell the coin.
  • Gold certificates - A certificate which represents ownership of gold bullion held by a financial institution. There is an associated fee for storage and insurance.
  • Gold futures and options - A futures contract traded on one of the futures exchanges, such as the COMEX in New York. This method is generally leveraged and options provide price movement much more than that of gold itself. It can be used to sell short and can be used to benefit from a drop in the price of gold.
  • Gold Mining stocks - Stock ownership of a company traded on one of the exchanges. The price movement is dependent not only upon the price of gold, but also upon the future of that corp.
  • Jewelery - By buying Gold Jewelery. Drayback is you have to pay for making charges & wastage associated with it.
  • Exchange Traded Funds (ETF) - Perhaps the safest method of buying and owning gold by buying shares in a fund based solely on the existing market price of gold.
  • Gold Mutual funds - Prices move faster and further in both directions than the price of gold.

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