scorecardresearchIs digital gold worth the investment?

Is digital gold worth the investment?

Updated: 20 Jun 2022, 08:26 AM IST

In the long term, investing in gold has always been profitable and favourable for investors, and today, with the added benefits of digital gold, it is safe to say that digital gold is well worth investment. But is it worth investing in? Let us find out!

Digital gold as the name suggests is bought digitally and is stored in insured lockers by the seller on behalf of the customers.

Digital gold as the name suggests is bought digitally and is stored in insured lockers by the seller on behalf of the customers.

Gold has been the most used currency in the world, but as the time passed it has become more of a liquid asset or a form of investment for people. Despite a global pandemic, Indians have found a way to invest in the yellow metal. As people became hesitant to visit jewellers, digital gold became the most possible alternative rather than holding the physical gold which increased the risk of theft and quality.

What is digital gold?

Digital gold as the name suggests is bought digitally and is stored in insured lockers by the seller on behalf of the customers. It also helps tackle the problems of theft, storage, authentication and adulteration which might be experienced by investors who invest in physical gold. The investors only need internet and mobile banking and then can invest in digital gold anytime and anywhere they wish to do so.

After understanding the meaning of digital gold, let us understand why digital gold is worth the investment. Therefore, let’s glance at the advantages of investing in digital gold.

READ MORE: Consider buying gold bonds through banks and demat accounts to contain inflation impact

Advantages of investing in digital gold

Investment is 100% secure

When the Investors buy digital gold, they are allocated the physical gold of the amount invested and are secured in high security vaults located on MMTC-PAMP premises. The vault is further protected by additional assurance of IDBI trusteeship which works to protect the interest of digital gold investors.

Sell digital gold anytime

There has been a surgical stick in the price of gold over the years, and investment in digital gold makes it easier to sell the asset at any convenient time without worrying about any additional costs. Once the asset is sold, funds are easily transferable to the registered bank account through instant bank transfer.

Investment as small as 1

The investors are allowed to invest in digital gold with a small amount over a long-period in the high value asset. The price of the yellow metal is determined by the wholesale market rather than local factors such as geography or the pandemic, therefore making it affordable for the investors. The investors who want to invest online, can go to MMTC-PAMP partners like PayTM, PhonePe, Gpay.

Hedge against uncertainty

After the world hit pandemic, people have shifted their interest back to gold as it has zero correlation with the such factors unlike other assets in the stock market which were hit terribly by the global pandemic. Gold investments have always been endorsed by the financial experts in order to diversify the portfolio, so that when uncertainty hits the liquid asset can come to the rescue.

Doorstep delivery

The investors can redeem their gold, as and when they want and it will be delivered to them on their doorstep. In the time of pandemic when people hesitate going somewhere, digital gold gives the benefit of just redeeming the asset and receiving 24k carat gold at their doorstep.

Even though investment in digital gold has various benefits and seems ideal, the investor also needs to pay attention to the fact that digital gold investments are not linked with government regulated bodies like RBI or SEBI, most of the times companies after a point of time do not keep the gold with themselves leading to either redeem or sell the asset. But as every concept has its pros and cons, so does digital gold.

Investment in the yellow metal has always been fruitful and advantageous for investors in the long-run and now with added benefits with digital gold, it can certainly be said that digital gold is worth the investment.

We draw a comparison between digital gold, gold ETF and gold bonds. 
First Published: 20 Jun 2022, 08:26 AM IST