Finance

What Type of Gold to Buy for Investment?

People are fascinated by gold. People of Chennai like to buy some gold during festivals and occasions with their saved money. Gold is considered noble and auspicious by one and all. Gold buyers and sellers in Chennai can now easily check today gold rate online. Online portal provides Chennai gold rate daily. Traders of gold can compare Chennai gold rates with gold rates of other places. The Chennai gold rates as well as gold rates of other places are expressed as price per gram of 22 karats or 24 Karats of gold.

Gold has been traded since the ages and the tradition continues even in the modern age. The sheen of gold is everlasting. In the present day gold based instruments can be purchased and sold online over secure portals. Over the ages gold trade has been highly organized so that people can buy gold without the need to actually hold the physical gold. Gold based instruments are as good as physical gold and can be redeemed on demand or can be held as contracts to possess gold at a future date. The price of units of gold based instruments is the same as Chennai gold rate of physical gold. Units of gold based instruments have values equivalent to current value of 0.5 gm of gold 18, 22 or 24 Karat current gold prices.

Different Ways of Holding gold in Chennai Include:

  • Physical Gold: People in Chennai may like to buy gold jwellery and gold coins and keep them in lockers. Most banks now sell gold coins. During times of monetary needs people can take gold loan from banks with their physical gold. Some people may like to sell physical gold instead of taking loan. Before selling or purchasing gold it is advisable to check today gold rate through online portal in Chennai as well as other places.
  • Gold Based Savings Accounts: Several banks are offering gold based savings account. These accounts facilitate investors to save gold in savings account format and also earn interest on their gold savings. Investors may choose to withdraw gold or deposit gold into their gold based savings account just like they withdraw or deposit money.
  • Gold Receipt Paper: Holding gold in physical form can present the problems of its safe keeping. Hence instead of purchasing gold in physical form people may purchase gold receipts from authorized exchanges of India. Buyers of gold receipts can redeem their receipts for physical gold any time they wish to. The gold receipt paper mentions the quantity of gold purchased in grams and specifies the karat number. Chennai gold receipt price is based on Chennai gold rate at the time of purchase of receipt. If the buyer redeems gold receipt paper at a future date then s/he is entitled to get the quantity and karat of gold purchased as mentioned in the receipt regardless of changes in Chennai gold rate. Gold receipts are accepted all over the country and can be exchanged for physical gold anywhere in the country.
  • Gold Contract Papers: Gold contract papers provide the right to its purchasers to obtain physical gold at some specified future date. Unlike gold receipt papers gold contract papers cannot be redeemed for physical gold whenever desired. If you are buying a gold contract paper in Chennai today, you will be entitled to obtain the gold amount and type as per the quantity and Karat chosen by you at the culmination of contract. For purchasing the gold contract with specified details of quantity and type you will need to pay as per today gold rate in Chennai. When you submit your contract paper at the end of the contract tenure you will get physical gold of quantity and karat type exactly as mentioned in your contract regardless of changes in gold rates.
    Investors in gold contracts can choose from among different types of gold contracts depending upon their investment preferences namely the forwards, futures and on call gold contracts.
  • Open Ended Gold Funds: gold funds are mutual funds that invest in gold and gold based instruments. Open ended gold fund units can be traded on NAV freely. Investments in gold based funds can be through lump sum or sip mode. One unit of gold fund is generally equivalent to price of 0.5 gm of specified gold karat. Gold karat denotes gold purity level and can be 18, 22 or 24.
  • Close Ended Gold Funds: these are essentially the gold bonds which have lock in periods or fixed tenures before which the investment cannot be withdrawn. Gold bonds also invest in gold and gold based market instruments but cannot be bought and sold freely.

Top Gold Based Market Instruments in Chennai and India

The fore mentioned names are not mutually exclusive. Most renowned trading, banking and investment companies are now offering gold based instruments. Included among these are:

• Kotak Gold Fund
• HDFC Gold Fund
• Reserve Bank Sovereign Gold Bonds
• Indian Depository Receipts (Gold)
• Gold Exchange Traded Funds (NSE)
• Multi Commodity Exchange of India (precious metals)
• ICICI Pru Regular Gold Savings Fund
• Birla SL Gold Fund
• IDBI Gold Fund
• Invesco India Gold Fund

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Abhishek Ranjan

I am a content writer with interests ranging from restaurants to high-risk investments. I love Belgian chocolates and Swiss watches and I spend my free time wandering around the world. I specialize in email marketing and copy-writing and love glossing over oddities around the world.

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