This is largely in form of gold jewellery, coins or bars for personal, cultural and traditional reasons.
Sachin Sawrikar, Founder and Managing Partner of Artha Bharat Investment noted that this works out to 25,000-30,000 tonnes of gold with 24 crore census households, which on average of 100-150 gm each is worth ₹15-20 lakh at current prices.
Besides owning physical gold, Indians can also invest in gold alternatives such as digital gold and paper gold. The latter includes options such as Gold Mutual Funds (MFs), Sovereign Gold Bonds (SGBs), and Gold Exchange-Traded Funds (ETFs).
What is Digital Gold?
The big difference between physical gold and digital gold is that you can purchase the latter online and the issuer stores them in a vault on your behalf. Notably, however, the investment is self-regulated and neither the Reserve Bank of India (RBI) nor the Securities and Exchange Board of India (SEBI) oversee the segment.
What is Gold ETF?
A commodity focused mutual fund that invests in gold in the domestic market, investors can purchase units which are each equivalent to 1 gram of gold and traded similar to equities on the stock exchange. A key benefit of Gold ETF is no hassles of safety and storage of gold, while offering returns comparable to physical gold and convenience of stock trading for liquidity.
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