How to Invest in Gold in India: 2024

Invest in Gold in India the gold market has witnessed an extraordinary surge, catapulting the gold price from Rs. 90 per gram in 1979 to an astounding Rs. 6,000 per gram in 2024.

This monumental increase has not only caught the attention of seasoned investors but has also opened up new avenues for lucrative returns.

Gold-investment-in-India

There are two methods to invest in gold in India: physical gold form and digital gold form.

Purchasing gold coins, jewellery, and bars is a physical gold investment.

Investing in digital gold includes buying gold bonds, gold ETFs, and mutual funds, as well as buying gold through internet platforms. Every option for buying gold has advantages and disadvantages of its own.

We’ll go over the advantages and disadvantages, as well as factors like cost, purity, taxes, and storage choices, in this post to help you make an informed choice about your gold investments.

Investing in Physical vs Digital Gold

Physical Gold InvestmentDigital Gold Investment 
Accessible as bars, coins, jewellery, or unprocessed gold.accessible through technological means
The gold is in your possession, and you are in charge of its protection and storage.Although you don’t actually own the gold, you do possess a computer image of it.
Although you don’t own the gold, you do possess a computer image of it.Bought and sold through jewelers, banks, and online marketplaces
There are expenses for storage and insurance.require neither insurance nor storage fees.
Give a feeling of solidity and safetyNot experiencing this emotion
A simple stock exchange or online platform purchases and salesSimple stock exchange or online platform purchases and sales
Purchasing and selling need physical labor and time.securely stored online or in a demat account.
There is a charge-making component.Platform fees raise the cost of investments overall.

How Much of Your Total Investment Should be Gold?

I advise you to use gold as a diversification technique by allocating 10% to 15% of the portfolio value.

Note: There isn’t one strategy that works for everyone, so what works for you could not work for someone else.

How to Invest in Physical Gold in India

1. Investing in Raw Gold 

In my view, the best way to invest in gold is to buy raw gold. I checked with my local jeweler, and the transactional costs are just 0.5%; I find that to be inexpensive.

Genuine raw gold may be obtained most safely and conveniently from your family jeweler. If you purchase gold from unidentified jewelers or suppliers, you run the risk of being duped or purchasing fake.

The disadvantage is that raw gold does not have a ready market. To deposit raw gold, you cannot visit a bank or use an internet platform. You must return your unprocessed gold to the jeweler, ideally the one you purchased it from.

Note of Caution: In India, raw gold is not a regulated good. Fraud or deception may be a possibility.

Read More : How to trade in the US stock market in India

Pros of investing in raw gold

  • Minimal transaction fees—just 0.5%
  • You don’t have to worry about contaminants or other metals mingling with the extremely pure raw gold.
  • If raw gold has special qualities, such as being huge or shaped differently, collectors could be ready to pay more for it.

Cons of investing in raw gold 

  • Locating a reliable jeweler might be difficult.
  • GST will be added if you accept the invoice
  • There is a greater chance of fraud and the purchase of fake gold since it can be challenging to determine the quality of raw gold.
  • It is difficult for novice investors to navigate

2. Investment in Gold Coins and Bars 

This method, which has a maximum loss of 2–3%, is regarded as the finest alternative after raw gold.

In India, banks, bullion dealers, and premium brands all readily sell gold coins and bars. Reputable suppliers of 24k and 22k gold coins and bars include Tanishq, Kalyan Jeweller, and MMTC-PAMP.

Additionally, banks sell certified gold coins.

The gold purity chart that follows will help novice gold investors distinguish between 22-karat, 24-karat, and other types of gold.

KaratGold percent
24 karats99.99%
22 karats91.6%
18 karats75%
12 karats50%
08 karats33.3%

In an 18-karat piece of gold, 25% is made up of other metals such as silver or copper, and 75% is gold.

It is important to check for BIS hallmarking and request a purity certificate when purchasing gold coins and bars.

Bear in mind that storing gold in the bank’s secure vaults may incur extra storage fees, which can run from Rs. 5,000 to Rs. 20,000 per year.

Pros of investing in gold coins and bars

  • Accessible via banks and reputable jewelry stores.
  • Easily purchased or sold in the marketplace.
  • It is regarded as the most pure kind of gold.
  • Accurate valuation is made simpler by hallmarking.

Cons of investing in gold coins and bars

  • Branding and transactional fees. A value loss of up to 5% is possible.
  • Requires appropriate storage measures to prevent damage or theft.
  • There are additional GST fees.
  • Planning is necessary when selling big gold bars, especially when funds are urgently needed.

3. Investing in Pure Gold Ornaments

Mostly in the form of jewellery, Indians own 25,000 tonnes of actual gold.

Indian households value pure gold jewellery as investments and cultural symbols since it is crafted from 22-karat gold that has 91.6% purity.

Although 24-carat gold is nearly entirely pure, it is too fragile to be used to produce jewellery without risk of breaking.

To make sure the jewellery doesn’t shatter, 22-karat gold is alloyed with copper or any other metal, such as silver.

24 carats would be required if you were purchasing gold coins and bars; however, 22 carats is the minimum amount needed if you were purchasing jewellery.

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A list of reputable jewellers where you may purchase gold

  • Tanishq
  • Kalyan Jewelers
  • Malabar golds and Diamonds
  • Joyalukkas Jeweler
  • Tribhovandas Bhimji Zaveri

The investing potential loss on pure gold jewellery is around 10–15%. The whole cost of the ornament, including manufacturing, waste, and a 3% GST, should be determined.

Don’t forget that a PAN card is necessary for purchases above Rs. 2 lakh.

Additionally, several jewelers provide gold plans that let customers purchase gold in convenient installments. For a predetermined duration of time, you make a monthly deposit of a set amount. When the program comes to a close, you may use the money you’ve saved to buy gold jewelry.

Pros of Investing in pure gold ornaments

  • At events and gatherings, you may flaunt yourself, which will make you feel good and enhance your ego.
  • Inflation and unpredictable economic times are hedged against gold.
  • Because of its low connection with stocks or bonds, gold can help lower the overall risk of a portfolio.

Cons of Investing in pure gold ornaments

  • High-cost production fees
  • Reduced profits when you sell
  • The danger of problems with purity from jewelers
  • Make sure that appropriate storage measures are taken to guard against theft or damage.

4. Investing in Gold Ornaments Studded With GemStones 

Some examples of gold accessories adorned with gemstones are ruby bangles, emerald rings, and diamond earrings.

The problem with gemstone-studded jewellery is that, unless you consult a gemologist, it may be difficult to ascertain the quality of the stones.

Although gold decorations with gemstones embedded in them may look attractive, they have significant disadvantages, including

  • Gems don’t gain as much value over time as gold does.
  • Gemstone damage is a serious concern.
  • The range of additional manufacturing costs is 12% to 18%.

How Much Physical Gold Can You Keep at Home?

By purchasing evidence, one can hold any quantity of gold. In theory, you may own gold jewellery and accessories in India without any restrictions.

An unmarried woman may own up to 500 grams of gold jewelry and accessories without having to purchase evidence of purchase.

Women who are single may possess up to 250 grammes of real gold at home.

Regardless of whether they are married or not, men are only permitted to retain up to 100 grammes.

How to Invest in Digital Gold in India 

1. Investing in Digital Gold 

Your digital gold is kept safe by three companies: Augmont Goldtech, MMTC-PAMP India, and Digital Gold India (Safe Gold).

These custodians work with reputable companies like Paytm, Groww, Amazon Pay, Airtel Payment Bank, Motilal Securities, and HDFC Securities to provide online investing in digital gold.

For instance, Paytm and MMTC-PAMP are partners in the role of custodian. MMTC-PAMP backs up your investment in digital gold when you purchase it on Paytm for Rs. 1000 by purchasing real gold and storing it in their secure lockers.

5 Best Gold ETFs in India 2023

Gold ETF5-Year Returns 
IDBI Gold ETF13.79%
Invesco India Gold ETF13.69%
Axis Gold ETF13.66%
Aditya Birla Sun Life Gold ETF13.62%
SBI Gold ETF13.56%

5 Best Gold MF in India 2023

Gold Mutual Fund5-Year Returns 
Invesco India Gold Fund14.20%
Axis Gold Fund13.99%
Kotak Gold Fund13.79%
SBI Gold Fund13.73%
HDFC Gold Fund13.62%

How to Invest in Gold for Beginners 

Because of its accessibility and ease, digital gold is a fantastic choice for young people just starting their careers and who are single. You can begin buying gold ETFs or sovereign bonds.

By investing 50% of their portfolio in both real and digital gold, married individuals may take a balanced approach.

How much money should I invest in gold?

Gold prices, from Rs. 90 per gram in 1979 to Rs. 6,000 per gram in 2024, are a testament to the enduring allure and financial potential of this precious metal.

What are the best ways to invest in gold for beginners in India?

Physical Gold. Of course, the easiest way to invest in gold is to buy gold coins, bullion, or jewellery.

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