Over the past few weeks, the prices of gold and silver have seen a significant increase. Gold has reached almost Rs 90,000 per 10 grams on the MCX, while silver has surpassed the Rs 1-lakh-per-kg mark. In the international market, the current price of gold is approximately $3,025 per ounce. What exactly is digital gold, and is it a good time to consider investing in it?
Advice by Keyur Shah, CEO, - Precious Metals Business, Muthoot Pappachan Group
Gold prices surged to a new all-time high above $3,000 on Tuesday, marking the second time in a week that the precious metal reached this milestone. Investors turned to gold as a safe-haven asset amidst economic uncertainties driven by US President Donald Trump's tariff policies. Spot gold prices peaked at $3,005.09 per ounce. With a history of retaining value during geopolitical turmoil, gold has seen a 14% increase in value so far this year. Since Trump assumed office in January, gold has achieved record highs on 14 occasions due to escalating trade tensions and heightened demand for safe-haven investments.
Digital gold is a fast-emerging alternative option, bringing the old ways of buying actual gold to new life. In recent times, everyone is trying their best to put their wealth somewhere safe and build it further through easy access to digital gold. Whether an investor is seasoned or new, digital gold brings the timeless value of gold into the modern age and allows investing in one of the world's most stable assets without the usual complexities of owning physical gold. Here are many of the benefits that digital gold provides and how that is changing the way people invest in precious metals.
From low entrance barriers to upgraded security and liquidation, investing in digital gold has opened newer avenues for any investor looking at diversifying one's portfolio. It combines gold's trust along with its worth with the convenient use of any digital platform it is offered by, making it a smart choice for most people looking to secure their finances. Let's take a step closer to examining how digital gold works and becomes a popular attraction for today's investors.
Easy Access to Low-Entry Barriers
One of the standout features of digital gold is just how easy and affordable it is to get started with, allowing investment down as low as Rs 1. This puts investment in gold right in the reach of practically anyone, rendering the existing barriers associated with buying physical gold largely obsolete. Buying gold in coins, jewelry, or bullion generally requires upfront capital. However, the fractional ownership model that digital gold avails to the investor allows a person to own a piece of gold, regardless of how little their budget may be, which can be accumulated over a period of time in a piggy bank style savings in Gold.
Flexibility & Liquidity
Digital Gold allows you the flexibility to invest as much or as little as you want, and you can buy it whenever you want. This way, you can buy tiny fractions of gold to suit your financial goals, however small they may be. Of course, starting small or wanting to diversify your investment portfolio also allows you to buy in increments, as its liquidity levels are quite high. The advantage of the system is that you can convert your digital gold to cash or receive it as physical gold. Best of all, you can buy and sell it 24/7, which is much more flexible than the traditional gold, which needs to be handled with care and stored.
Security Without the Hassle
One of the significant advantages of digital gold is that you do not have to think about storing it safely. You do not need to store physical gold in a safe place such as an insured vault to avoid theft or damage. Once the customer purchases digital gold, that much amount of physical gold is stored in secure vaults managed by trusted companies. Many of these digital gold investment platforms offer 100% insurance on your stored gold, which provides you with another layer of protection. With digital gold, you can be sure that the integrity of your holdings is assured through regular audits.
Real-Time Pricing and Transparency
Another good thing about digital gold is that it's shown online in real-time, meaning you'll always know the price at which you're buying the gold, thus having enough knowledge of when to buy and when to sell. You will not need to go and find a physical shop or have any fluctuating premium since everything happens on the website, hence it is so easy to trace.
Option to Get Physical Gold
Most platforms where you are investing in digital gold allow you to redeem it into physical gold whenever you want. Thus, if you like owning real gold bars or coins or jewelry, they can be sent to your doorstep. You will have to pay making charges and shipping fees, but you'll get a tangible asset. This means it would be possible to enjoy the convenience of digital gold while holding physical gold when desired.
Growing Popularity and Future Outlook
Digital gold has been gaining popularity, especially during the economic downturn. Due to its ease of use and the ability to manage investments remotely, it has become very popular among young, tech-savvy investors. The epidemic accelerated this shift to some extent as more people turned to digital alternatives for their financial needs. Future developments are expected to make digital gold even more attractive as it continues to gain popularity.
Risks to Consider
Despite these benefits, one needs to know about the potential risks. Cyber-based platforms always have security threats because digital gold platforms can be hacked anytime. This could lead to the loss of the account and other relevant information. The safest way is to choose reliable platforms that ensure robust security and adhere to all regulatory requirements. Also credibility of the service provider is important since this is still not a regulated product. Hence it is important to choose the right player - an organized sector player who follow best business practices, has good credibility and complies with all the required rules and regulations, gets the physical gold lying in vaults audited from third party auditors etc.
Conclusion
Digital gold is revolutionising the way people think about investing in gold by combining the timelessness of the metal with digital convenience. It is making gold more accessible for investment purposes, safer, and liquid as well, appealing to the investors of today who want both simplicity and stability. The real-time pricing, easy buy-and-sell options, and even the power of converting it to physical gold show why digital gold can be a better alternative than the traditional mode of owning gold.