When it comes to affordability, you can start investing. In the debate between digital gold and gold ETFs, it may seem that both are side by side. However, keep in mind that digital gold doesn't really offer any significant advantage over investing through gold ETFs. The only differentiator is the physical delivery option between digital gold and the gold ETF, which doesn't offer this option.
The debate about which form of gold (physical, digital, SGB or ETF) is the best is endless. It depends entirely on people's discretion and on the occasion. Digital gold is a relatively new way to invest in physical gold, which seeks to please both sides of the debate between physical and financial gold. Gold ETFs offer the ability to time the market, make the price of gold move efficiently and accumulate through SIPs if desired.
Another way to invest in gold without the hassle of physical custody, which has been gaining popularity are gold ETFs. Most will measure the purity of the gold, calculate the weight, and then give you the quantity based on the day's price of gold. A unit of the gold ETF represents one gram of pure gold at 99.5% and this is also the minimum purchase amount. Investors in gold ETFs have to pay fund management and brokerage costs when entering and leaving the investment.
Still, to sum up, the digital way of investing in gold can be a lucrative option for those who want to sell their portfolio and continue investing in gold from a longer-term perspective, said Prathamesh Mallya, AVP- Research, Non-Agri Commodities and Currends at Angel One Ltd. Most investment experts recommend distributing investments among various asset classes, such as stocks, bonds, gold, real estate, etc. Many of the alternatives to investing in physical gold have arisen out of the need to address one or more of the shortcomings of investing in physical gold, such as liquidity and the costs associated with safeguarding it. In India, one of these three players sells digital gold: MMTC-PAMP, Augmont and Digital Gold India (SAFEGOLD).
An additional layer of cost to which gold ETFs are subject is fund management fees, but they are very low. This is also one of the main reasons behind the rise of digital gold as one of the best investment plans. The three most popular ways to hold gold digitally are to buy sovereign gold bonds (SGB), exchange-traded funds (ETFs) and gold units on websites or apps. Even if it were an option, it may not be the wisest one if the purpose of buying gold is solely from an investment point of view.
The possession of paper gold through digital media has increased and digital gold is rapidly becoming an easier, simpler and more cost-effective way to participate in the potential of gold as an asset class.