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NEW DELHI -- With stock markets in turmoil, there is once again a rush to the traditional safe haven, gold. The good news is that there are now several options available for investing in gold and one need not take physical delivery.

Apart from the option of exchange traded funds (ETFs) and gold SIPs (systematic investment plans), one can also buy coins, bars from banks, jewellery shops and post offices. Coins and bars purchased from banks and post offices ensure that you get a purity certificate.

However, the flip side is that you can't sell the gold back to the bank or post office when you want to exit. Most branded gold coins from reputed jewellers or commodity firms, on the other hand, come with a buyback plan. Several jewellery companies and shops also offer gold investment schemes which can run up to five years. However, make sure to choose the right scheme and enroll in a reputed store or with a well-known brand.

Experts say the most hassle-free option is to open a demat account with the National Spot Exchange ( Retail investors can trade and invest in commodities like gold just as they can in stocks. Investment is in small denominations, for example 1gm for gold and 100gm for silver.

This option offers convenient and secure online buying and selling and you don't have to pay for storage or holding costs. An investor can take physical delivery of accumulated demat units at several outlets across the country. But some experts caution that this is not a good time to buy gold. "It is too overvalued. It is not a one-way ticket. There will be a retrace of 10-15% when the risk appetite returns," warned Gnagnasekar Thiagrajan, director of Commtrendz.

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Publication:Pakistan & Gulf Economist
Date:Aug 21, 2011

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