How to Buy or Invest in Gold Online

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  • 31 Mar 2023

For long Gold has been considered as a valuable asset and a safe haven for investors. In today's digital age, the convenience of buying and investing in gold online has become increasingly popular. You can invest in the precious yellow metal in several ways online. What are these? Let's find out.

Some popular ways to invest in gold online are:

Gold ETFs, or Gold Exchange Traded Funds, allow you to invest in gold without physically owning the metal. They are like mutual funds but traded on stock exchanges like individual stocks. Gold ETFs allow you to gain exposure to the price movements of gold without the need for buying, storing, and managing physical gold.

Here are some key features and characteristics of Gold ETFs:

  • Backed by Physical Gold: Gold ETFs are backed by physical gold holdings. The fund manager purchases and holds gold bullion or other approved forms of gold, such as bars or coins, as the underlying asset for the ETF.

  • Tradable on Stock Exchanges: Gold ETFs trade on stock exchanges, allowing you to buy or sell units of the fund throughout the trading day, just like any other stock. They have ticker symbols and can be purchased or sold through brokerage accounts.

  • Fractional Ownership: Gold ETFs offer the flexibility to buy and sell gold in smaller denominations. Each unit of the ETF represents a fraction of an ounce of gold. This makes it accessible to investors who may not have the means to purchase large quantities of physical gold.

  • Cost Efficiency: Gold ETFs generally have lower expense ratios than actively managed funds. This is because the management of the ETF is typically passive, aiming to replicate the performance of the gold market rather than actively selecting individual assets.

  • Liquidity: Gold ETFs are highly liquid investments due to their listing on stock exchanges. You can purchase or sell units of the ETF at prevailing market prices throughout the trading day. This provides flexibility and the ability to convert investments into cash if needed quickly.

  • Convenience and Storage: Unlike physical gold, Gold ETFs eliminate the need for storage, insurance, and security concerns. Investors can buy or sell units electronically, eliminating the logistical challenges associated with physical gold ownership.

SGBs are a financial instrument issued by the Government of India, specifically the Reserve Bank of India (RBI), as a means for individuals to invest in gold. These bonds were introduced in 2015 as an alternative to physical gold. SGBs aim to provide investors with the benefits of owning gold while eliminating the need for storing physical gold and addressing the concerns associated with purity, security, and liquidity. Here are some key features of SGBs.

  • Government-Backed: Sovereign Gold Bonds are issued by the Government of India, making them a reliable and secure investment option. These bonds are backed by a sovereign guarantee, ensuring the safety of the investment.

  • Denominated in Grams of Gold: SGBs are denominated in grams of gold, allowing investors to know the exact amount of gold they own. The minimum investment requirement is usually 1 gram of gold, and investors can purchase up to a specified maximum limit.

  • Fixed Tenure: Sovereign Gold Bonds have a fixed tenure, typically 8 years. The bonds carry an interest rate, which is payable semi-annually, providing an additional incentive to investors. The interest rate is fixed at the time of issuance and is subject to revision for subsequent issuances.

  • No Storage Hassles: One of the main advantages of investing in SGBs is that you do not need to worry about the storage and security of physical gold. The bonds are in electronic format, eliminating the risk associated with physical gold storage.

Gold futures contracts are financial derivatives that allow you to speculate on the future price of gold. These contracts enable participants to buy or sell gold at a predetermined price (the futures price) on a specified future date. Gold futures are traded on commodity exchanges like the Multi Commodity Exchange (MCX).

Here are key aspects of gold futures contracts:

  • Standardized Contracts: Gold futures contracts are standardized agreements that specify the quantity and quality of gold being traded. The contract size for gold futures typically represents a certain number of troy ounces (e.g., 100 troy ounces) of 24-karat gold.

  • Future Delivery Date: Gold futures contracts have a specified delivery or expiration date in the future. This date represents the point at which the buyer and seller are obligated to either take or make delivery of the physical gold or settle the contract in cash.

  • Long and Short Positions: Market participants can take a long or short position in gold futures. A long position means the buyer agrees to purchase gold at a future date, while a short position represents the seller agreeing to deliver gold at a future date. These positions can be held or closed before the contract expiration through offsetting transactions.

  • Margin Requirements: Futures trading involves using margin, which refers to the initial deposit required by the exchange to open a position. The margin acts as collateral to cover potential losses. Margin requirements vary based on the contract's size, volatility, and market conditions.

  • Price Fluctuations and Profits: Gold futures prices are subject to market forces and can fluctuate based on factors like supply and demand, economic indicators, geopolitical events, and investor sentiment. Traders aim to make profit from this price movement by buying low and selling high (long position) or selling high and buying back low (short position).

To invest in gold online, you need to:

  • Choose a reliable online platform or broker that offers gold investment options
  • Open an account with the platform and complete the necessary registration process
  • Browse the available gold investment options (such as digital gold, Gold ETFs, or SGBs) and select the one that suits your investment goals
  • Place an order to buy gold online through the platform

In Conclusion

Investing in gold online provides convenient and accessible means to diversify your investment portfolios. By understanding the different forms of gold, choosing a reliable platform, verifying purity, researching market trends, and taking steps to secure your investment, you can confidently navigate the online gold market. Remember to exercise due diligence, stay informed, and make well-informed decisions to capitalize on the potential benefits of investing in gold.


There are several ways to invest in gold online, including:

  • Digital Gold: Purchase gold in small denominations online and hold it in digital form
  • Gold ETFs: Invest in Exchange-Traded Funds which are traded on stock exchanges
  • Sovereign Gold Bonds (SGBs): Invest in government-issued bonds backed by gold

Investing in gold online can be safe if you choose a reputable and regulated platform. Ensure the platform offers secure payment options, employs encryption technology, and follows stringent security measures to protect your personal and financial information. It's also essential to verify the authenticity of the gold being offered and check for proper certification.

Yes, most online platforms allow you to sell your gold investments online. You can place a sell order through the platform, and upon execution, the proceeds will be credited to your account. Make sure to check the platform's selling process, any associated fees, and the current market price of gold before initiating the sale.

Yes, many online platforms offer the option to buy gold in small quantities, such as digital gold or fractional shares of Gold ETFs. This allows you to start with smaller investments and gradually increase your holdings over time.

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