• Source:JND
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Investment In Gold: The government recently decided to discontinue the Sovereign Gold Bond Scheme after a rise in gold prices making it difficult for governments to run it sustainably. The current price of gold in the global market is $2,800 per ounce, compared to $2,830 a few days ago. Gold prices in India have touched Rs 84,900 per 10 grams as well. The surge in prices is fueled by global economic uncertainty and the tariff policy under the US administration. Analysts expect gold prices to continue to rise.

Now that the SGB scheme is defunct, investors have two main options: gold ETFs and gold mutual funds. Both these investment options trade in secondary markets and are easier to manage than gold, so there are no issues with storage and cleanliness.

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Gold ETFs: Safe and Liquid Investments

Gold ETFs track the price of gold. Therefore, their value fluctuates according to the price of gold. Each unit of a gold ETF represents one gram of gold. The investments are backed by actual gold reserves.

Gold ETFs are traded on stock exchanges and, therefore, offer good liquidity and security. However, investing in gold ETFs requires a demat account. They are a safe investment option, but there are a lot of inflows and outflows.

Gold Mutual Funds

Gold Mutual Funds are open-ended funds that invest in gold ETFs. These funds are actively managed by a fund manager who can provide excellent long-term returns. Each unit of a gold mutual fund is priced according to its net asset value (NAV), and the returns tend to be higher than the price of gold.

Compared to gold ETFs, the expense ratio for gold mutual funds is slightly higher but flexible. There is no need for a demat account and retail investors can start with less money. According to Value Research, gold mutual funds have generated returns of 29.45% in a year.

While closing SGB schemes may not be a good idea for some investors, gold ETFs and gold mutual funds are good options. Both are efficient, safe and easy to manage, making them suitable for many investors.

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