Recent data indicates that investors have started accepting electronic means of investment in Gold versus holding physical gold. Electronic investment in Gold offers benefits of ease of investment, liquidity and no risk of purity. Due to these factors, Gold Open Ended Funds and Gold Exchange Traded Funds (ETFs) have seen net inflows to the tune of Rs.184 crore and Rs.680 crore respectively in the month of April 2021. Furthermore, investments in Sovereign Gold Bonds (SGBs) have also increased since they offer an additional 2.5% p.a interest on investments along with tax benefits. The table below clearly shows a substantial increase in investments through these routes over the last financial year:
Inflow Trend of Non-physical Gold Investment Options
|SGBs (Rs. crore)*||16,049||2,316|
|Gold ETFs (Rs. crore)**||6,919||1,613|
*Source: RBI Annual Reports
Gold has been a preferred investment for Indians over the years. However, most Indians preferred holding physical Gold versus electronic Gold. Now the perception seems to be changing and Gold investments through online methods are also expected to continue witnessing increased traction.