Is it a good time to invest in Gold. Any time is a good time because this is a metal. The value of the Metals are only going to increase with time and never decrease. This is because it is very rare that a new gold mine etc are discovered which can bring the value down. With many satellites and technology to determine the inside of earth crust the chances of a new mine getting discovered is almost impossible. With increasing extracting costs and along with the new demand (whenever there is a slowdown in any part of the world) the prices of gold are bound to increase. So investing in Gold is the right thing to do. After gold if you want to invest the next option is to invest in silver. Every day a new gold ETF or mutual fund is being announced, even this increases the demand for metal. At the current consumption rate of Gold it is expected that the current resources of Gold will get extinct in another 8-9 years, unless you hear of a huge gold mine being discovered.
There are different ways if you want to invest in Gold or metals in general. Two smarter options are Gold ETF and Gold mutual funds. Ofcourse, you have the traditional way of investing in Gold. The problem with that is you need to safeguard the gold in possession yourself.
Lets look at these two options of investing in Gold / metals and which one is more advantageous for you.
Gold ETF: equity traded funds are just like shares / equities. You need to have a demat account to trade in these shares. This comes with transaction charges and demat charges. If you are interested in short term trading then this is the one for you. Since these are equities you need to buy Gold ETF's in multiples of units.
Gold Mutual funds: For having the gold mutual funds you need not have an associated demat account. You can invest in these funds using a systematic investment plan that protects you from ups and downs of the volatile market. On a long term this might be a better bet. However, this is associated with entry load and exit load. There are like mutual funds so you can invest any amount. In India however there doesn't exist any mutual fund that can directly invest in physical Gold. Instead invests in Gold ETF. Hence the performance of Mutual funds will be slightly lesser than that of corresponding ETF's since it incurs mutual fund maintenance costs as well. So in India, Gold ETF's are surely a better option compared to Gold Mutual funds.
These are options you get for investing in Gold. There are other ETF's similar to gold ETF. They are silver ETF, copper ETF, Lead, zinc etc.
In the recent times Siver ETF's have outperformed Gold ETF's. However, in India Silver ETF's are yet to make it to the market since there are laws which doesn't allow it to enter India. So investing in Silver through commodities would be a better bet.
Commodities: There is also the option of investing in these metals including gold through commodities. If you invest in commodities then you have the option of converting it into the physical form as well at a nominal charge. Even this comes with the advantage that you need not safeguard it yourself yet can be converted to physical form. This option is not available either in metal ETF's or metal mutual funds.
National spot exchange is an exchange where you can trade in metals. This stock exchange deals specifically with trading in metals. Presently it allows trading in Gold, Silver, Copper and Zinc.
Egold: another option to invest in gold is to invest in e-gold. Similar to NSE and BSE for stocks there exists National Spot Exchange to invest in E-Gold and other metals like silver, copper etc. However, it doesnt have long history and not many customers are used to it.
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Best Gold ETF's in India
e-gold and e-silver
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