How To Invest In Gold In Stock Market ?

June 05, 2019

Invest in Gold in Stock Market

Apart from jewellery, gold has been, historically a popular investment option in India. People who are not interested in purchasing physical gold can now also invest in this precious metal through stock exchanges. Read this post to know different ways in which you can invest in gold in the Indian stock market.

India is one of the biggest importers of gold in the world. The precious yellow metal has a great significance in the Indian tradition; people buy gold jewellery for various occasions and festivals. Apart from its traditional importance, gold is also an excellent investment option and a tool that can help you navigate through financially challenging times. But safe-keeping and storage are two of the biggest drawbacks of purchasing physical gold. Investing in gold in the stock market allows you to invest in the metal in digital format, eliminating the need for you to worry about its safety and storage. Here are a few different ways in which you can invest in gold in the stock market:

1. Gold ETFs

Gold Exchange Traded Funds (ETFs) are one of the most popular and cost-efficient ways if you are looking for how to trade gold in the stock market. These funds are traded on Indian stock exchanges just like stocks of companies, and you can buy and sell them anytime you like. With Gold ETFs, you are not required to worry about the high making charges of gold jeweller as you will be buying gold in digital format. However, you will need a Demat Account to invest in Gold ETFs.

2. SGB

If you are looking for how to invest in gold online, Sovereign Gold Bond (SGB) is also an excellent option. SGBs were launched by the Reserve Bank of India (RBI) to help the country reduce its reliance on other countries for gold imports. Investing in SGB is similar to investing in physical gold, and you are free to select how much gold you want to buy.

The RBI opens the SGB purchase window at regular intervals, and the same can be purchased from the official website of RBI or through banks. Even after the purchase window is over, you can still buy SGB on stock exchanges.

3. Gold Futures

Another way to invest in gold is through the commodity markets. You can purchase Gold Futures contracts on commodity exchanges like Multi Commodity Exchange (MCX) in India and sell the same at a later date if the price of the contract increases. But before investing in gold shares or futures contracts through commodity exchange, make sure that you first understand how these contracts and their expiry work.

4. Gold Mutual Funds

Gold Mutual Funds are funds of funds, which invest your money in Gold ETFs on your behalf. They are very much similar to investing in Gold ETFs, but eliminate the need for you to have a Demat Account. Simply complete the online Know Your Customer (KYC) just like you do for mutual funds for investing in these funds. Moreover, most of these funds also offer the Systematic Investment Plan (SIP) option, which makes them an excellent gold investment plan. These mutual funds too, are available on National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) stock exchanges.

Selecting the Right Gold Investment

These are some of the different ways in which you can invest in gold online on stock exchanges without the need to purchase any physical gold. Gold investment returns are known to be highly reliable, and it is also an excellent way to diversify your investment portfolio.

Understand the options mentioned above in detail and select one that best suits your investment profile and objective.

 

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