Gold investment- Best ways to Invest in Gold

By Team Gullak

Oct 18, 2024

5 min read

Gold as investment has been one of the go-to options for Indian households. Today, Indian households hold more 27,000 tonnes of gold, making us the 2nd largest consumer of the asset in the world. In this article, we will discuss the various questions that investors might have on gold investments- is gold a good investment, best ways of investing in Gold and their returns.

How is Gold as an Investment?

Before we dive deep into how gold is as an investment, let’s take a look at gold’s annual returns across different time horizons:

Last 10 years- 12.4%

Last 5 years- 14.94%

Last 1 year- 28%

For comparison, NIFTY50 has given an annual return of ~25% in the last 1 year. Now that we have established that gold is a great as an investment, let's take a look at a look at some of the other benefits of gold investment:

Types of Gold Investments and Gold investment returns

In today’s landscape, there are 3 major ways of investing in gold. In this section, we will discuss them in detail so that you can choose which gold investment to go with.

Digital Gold

Digital Gold is a gold investment option where you buy gold digitally using apps like Gullak. When you buy digital gold, an equivalent quantity of physical gold gets automatically stored in sequel vaults. So, you end up getting all the benefits of gold while negating all the cons that physical gold comes with like storage issues and high making charges. Digital gold investments start from as low as ₹10. You can withdraw your investments anytime you want as cash or redeem in gold.

Gold investment returns- 11%(average gold price increase)

Gold ETFs & Mutual Funds

Gold ETFs are Exchange Traded Funds which track the price of gold without actually buying gold. One unit of gold ETF is equal to 1 gm of Gold. There are no lock-in periods and you can withdraw anytime you want. Unlike digital gold, you can not withdraw in the form of physical gold.

Gold investment returns- 11%(average gold price increase)

Gullak Gold+

Gullak Gold+ is a gold investment option where not only do you benefit from gold price increase but your gold quantity also increases by 5% every year. So, if you invest 100 gms in Gullak Gold+, in one year it’ll become 105 gms and in 8 years it’ll become 148 gms. All the 148 grams also benefit from gold price increase at the same time.

You can withdraw anytime you want as cash or gold coins or redeem gold jewellery from Gullak’s partner stores like CaratLane by Tanishq and Kalyan.

Gold investment returns- 11%(average gold price increase) + extra 5% gold pa

Now that we have had a brief look at the various modes of gold investment, let’s compare all the gold investment assets in a tabular manner:

Table: Comparison of different gold investments

Concluding thoughts on Gold investments

Gold has always been an evergreen investment option in India. However, it is important to choose wisely before investing in various forms of gold. Gold investments like physical gold come with hefty making charges making them a sub-optimal way to invest in gold. On the other hand, options like digital gold and gold ETFs negate the unnecessary charges and improve the value of gold as an investment. Gullak Gold+ provides all the benefits of digital gold and Gold ETFs while providing the added benefit of extra gold every year.