There are many avenues through which you can invest in gold.
The first one being holding it in physical form and buying it through jewelers either in the form of jewelries or buying gold coins or gold bars which are 99.9 % pure.
The second medium is through buying Gold ETFs, wherein each unit corresponds to a gram of gold. Most of the big brokerage/fund houses have gold ETFs, like HDFC Gold ETF, Reliance Gold ETF, Kotak Gold ETF. One can invest in gold ETFs in small quantities. Gold ETFs are traded in the open market and one can buy them from the market. Price of gold ETFs do correspond closely to the price of gold as a commodity, however gold ETFs may incur fund management charges or handling charges. The delivery at the time of selling gold ETFs is just like any other stock, however one can take delivery in the form of physical gold only if the total quantity (units) meet a certain criteria (the criteria depends on the fund house - this is usually very high, if I am not wrong then it`s 1000 Grams). Fund houses do offer a SIP in gold ETFs also for example HDFC bank has a DIYSIP scheme which allows one to invest in Gold ETFs in small quantities, here the customer can define how many units does he want to buy on a monthly basis, what is the threshold amount above which the trigger does not execute and what is date when the buy order should be placed.
The third form of investing in gold is again through Gold Funds which is a fund of funds. A recently launched gold fund is SBI gold fund which allows a SIP of as low as Rs 100 to be invested in the mutual fund. However since gold funds are fund of funds one may have to incur the fund management charges of the gold fund as well as of the underlying funds. If I am not wrong then one does not need to have a demat account for investing in gold funds.
The fourth option is through opening an account in National Spot exchange wherein one can invest in small quantities in gold (the scheme is called as e-gold). However this investment comes under the normal income tax whereas investing through gold ETFs comes under the long term or short term income tax rule. Investing through national spot exchange will require you to open a demat account with one of the appointed brokerage houses.
The fifth option is buying future contracts through MCXIndia. MCX india has started 1Gram Gold Petal Contracts for retail investors. The delivery can be taken in physical form only in multiples of 8 Grams. You can visit the followin site for more details -http://www.mcxindia.com/goldpetal/index.html
The first one being holding it in physical form and buying it through jewelers either in the form of jewelries or buying gold coins or gold bars which are 99.9 % pure.
The second medium is through buying Gold ETFs, wherein each unit corresponds to a gram of gold. Most of the big brokerage/fund houses have gold ETFs, like HDFC Gold ETF, Reliance Gold ETF, Kotak Gold ETF. One can invest in gold ETFs in small quantities. Gold ETFs are traded in the open market and one can buy them from the market. Price of gold ETFs do correspond closely to the price of gold as a commodity, however gold ETFs may incur fund management charges or handling charges. The delivery at the time of selling gold ETFs is just like any other stock, however one can take delivery in the form of physical gold only if the total quantity (units) meet a certain criteria (the criteria depends on the fund house - this is usually very high, if I am not wrong then it`s 1000 Grams). Fund houses do offer a SIP in gold ETFs also for example HDFC bank has a DIYSIP scheme which allows one to invest in Gold ETFs in small quantities, here the customer can define how many units does he want to buy on a monthly basis, what is the threshold amount above which the trigger does not execute and what is date when the buy order should be placed.
The third form of investing in gold is again through Gold Funds which is a fund of funds. A recently launched gold fund is SBI gold fund which allows a SIP of as low as Rs 100 to be invested in the mutual fund. However since gold funds are fund of funds one may have to incur the fund management charges of the gold fund as well as of the underlying funds. If I am not wrong then one does not need to have a demat account for investing in gold funds.
The fourth option is through opening an account in National Spot exchange wherein one can invest in small quantities in gold (the scheme is called as e-gold). However this investment comes under the normal income tax whereas investing through gold ETFs comes under the long term or short term income tax rule. Investing through national spot exchange will require you to open a demat account with one of the appointed brokerage houses.
The fifth option is buying future contracts through MCXIndia. MCX india has started 1Gram Gold Petal Contracts for retail investors. The delivery can be taken in physical form only in multiples of 8 Grams. You can visit the followin site for more details -http://www.mcxindia.com/goldpetal/index.html
