How to start investing in gold

How to start investing in gold: Besides jewelry, India’s most popular investment option has historically been gold. Stock exchanges now allow investors to invest in gold without buying it physically. You can invest in gold in Indian stocks in several ways by reading this post.

How to start investing in gold
How to start investing in gold

In order to diversify a portfolio of investments, investing in the digital version of a commodity can be beneficial. With digital gold investing, small payments can be made for a certain period, and the commodities are accessible wherever and whenever with the convenience of digital access. 

Also Read : How to manage the finances of a small business

How to start investing in gold

World-renowned gold is an item of great value. Gold spans cultural boundaries from currency to electronics to jewelry with artisan value and has played many roles throughout history. A unique investment, gold remains an appealing option to many investors today as a viable alternative to traditional equities and bonds.

Inflation is also hedged by gold. Gold values rise with rising costs of goods. Due to gold’s finite supply, gold owners maintain their purchasing power despite low-interest rates since gold is available in finite amounts.

These are five ways to own gold 

The gold bullion market

Buying gold in bars or coins can be a more satisfying way to own it emotionally. When you own more than a little bit, you’ll have serious drawbacks, too, because you won’t be able to look at and touch it. Insuring physical gold is a major drawback.

Physical gold buyers entirely depend on the price of the commodity rising to make a profit. Unlike business owners (such as gold mining companies), who can make more profit, thus driving their investment higher, there are no hidden costs associated with managing a business.

Investing in gold mutual funds

Stocks in mutual funds can be added to an investor’s portfolio as a gold investment. Investing in gold-related mutual funds, such as gold ETFs, provides exposure to stocks of international gold companies. These mutual funds track gold prices as their assets rise and fall. 

Some of India’s most popular gold mutual funds include IDBI Gold Fund, Invesco India Gold Fund, Nippon India Gold Savings Fund, and DSP World Gold Fund Quantum Gold Savings Fund. 

Investing in gold ETFs

If you’re interested in trading gold in the stock market, Exchange Traded Funds (ETFs) are a popular option. Just like stocks of companies, these funds can be bought and sold on Indian stock exchanges at any time. Since Gold ETFs facilitate the purchase of gold in digital form, there is no need to worry about the high making costs of gold jewelers. The only requirement for investing in Gold ETFs is a Demat Account.

The gold futures market

In addition to buying gold futures, you can also physically deliver gold, which is not what motivates speculators.

You can use a lot of leverage when investing in gold using futures. You can own many gold futures for a relatively small sum of money. You can make a lot of money quickly by investing in gold futures if the market moves in the direction you believe in.

Stocks of gold mining companies

Gold mining companies can be invested in instead of gold itself. As gold prices rise, the value of a company’s gold inventory should rise, increasing the share price of gold mining companies.

Additionally, skilled management might enable miners to use less energy and spend less money to obtain more gold. Still, better management might result in more gold extraction and cost. Thus, there are both upsides and downsides to this. It is also important to be aware of mismanagement in a mining company, which can be a significant risk factor. There are also environmental and legal policies that might affect the company’s existing operations, as well as the company’s debt and gearing.

What makes gold so appealing to investors

“Global Head of Research at the World Gold Council, Juan Carlos Artigas, says gold is an effective diversifier because of its returns, liquidity, and low correlation.

Investors should pay attention to the following qualities:

  • Investing returns: Gold has usually outperformed bonds and stocks over long periods, although it doesn’t always do so.
  • Availability of liquidity: Gold-based investments can easily be converted to cash if you buy certain kinds.
  • A low correlation: Stocks and bonds seldom perform the same as gold, so when they rise, gold may fall.

The following are other potential advantages of gold:

  • Portfolio diversification: Gold has a low correlation with other assets, which makes it an excellent asset to diversify portfolios, thereby reducing overall portfolio volatility.
  • Defensible investment: Gold is often viewed as defensive when the economy is under threat.

In addition to these benefits, gold carries some risks and drawbacks, like any investment.


Q1. Which is the best way to invest in gold?

Ans: Investing in gold has become easier with exchange-traded funds. In the same way as common stocks, gold ETFs can be traded on stock exchanges, just like securities that invest in gold. For gold ETFs to be traded, investors must purchase a unit of one gram of gold.

Q2. How can a beginner invest in gold?


  1. Gold purchase in physical form.
  2. Structured investments linked to gold.
  3. ETFs and unit trust that invests in gold.
  4. Stocks of gold mining companies are good investments.
  5. Understand what you’re investing in before you make a decision.

Q3. Is buying gold a good investment?

Ans: Even though gold’s price can fluctuate in the short term, its long-term value has always been maintained. Investing in it has proven to be an excellent hedge against inflation and currency erosion.


Only some people are interested in gold, and some prefer to place their bets on cash-flowing businesses rather than waiting for someone else to cover the premium. Warren Buffett, one of the most famous investors, cautions against investing in gold and instead advocates buying cash-flowing businesses. In addition, if you need to convert your position into cash, you can quickly do so with stocks or funds.

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