Gold, often called the safest heaven has started picking steam and has become the most preferred Investment Option as Stock Markets are turning volatile by the day. And this spurt in trading volumes, has led to some innovative products being introduced in the Market.

Issues with Physical Gold

Till now, Gold was usually kept in physical form (bars, coins, bricks etc). But keeping Gold in Physical Form has some hassles associated with it like

  1. Purchasing Physical Gold is not advised as storing proper storage of Gold is cumbersome
  2. The risk of Gold Theft has been present since time immemorial.
  3. Moreover, the purity of Gold has also become an Issue.

With the advent of Dematerialisation, some new forms of Investing in Gold have emerged which overcome the above problems associated with Gold. In this article, we’ll highlight what is Gold ETF and the Benefit of investing in Gold ETF.

What is Gold ETF?

Gold ETF refers to Gold Exchange Traded Fund and it is traded on all major Stock Exchanges. Purchasing a Gold ETF is just like purchasing shares on the Stock Exchange wherein you purchase the Gold Online and keep it in your Demat Account.

Gold ETF fund purchase a large amount of gold, maintaining the physical metal in storage. The Physical Gold is held by the ETF and Investors are issued Shares for their Investment.

Benefits of Investing in Gold ETF

  1. No hassles with respect to physical storage of Gold as the Gold ETF purchased by the Investor are kept in his Demat Account.
  2. As these are purchased and sold online, the Govt keeps a strict eye on the same and therefore they are of highest purity which is sometime an issue when purchasing Gold from Jewellers.
  3. What makes this type of Investment is that they are traded in small units and each unit of ETF represents one gram of Gold.
  4. These are bought and sold at the Wholesale Price with Good Liquidity

Interesting Fact: –

India has the largest fascination for gold than any other country in the world and is by far the world’s largest buyer of gold, accounting for 9.5 percent of the world’s total gold holdings.  More impressive is the fact that current demand from India alone consumes 25% of the world’s annual gold output.