4 Ways To Invest In Gold With Little Money

It has been a tradition among Indians to invest in gold for financial security and sentimental reasons. Important events in Indian households are marked with the purchase of the precious metal. It is accumulated to meet shortcomings that could arise in an uncertain future.

The age-old tradition to accumulate gold for the future is also a great way to diversify one's investment portfolio. The yellow metal is a hedge against inflation and a safe haven amid economic uncertainties.

This year, due to the sudden outbreak of COVID-19, gold prices in India as well as abroad have soared over 20%. Before any positive news on the vaccine trials, more and more investors parked their funds in the metal and out of risky assets, causing gold prices to hit new all-time highs.

However, in 2020, Indians opted for the metal as an investment, looking beyond festive or matrimonial purchases.

Between July and September this year, demand for gold jewellery fell 48% year-on-year, to 52.8 tonnes, from around 101.6 tonnes, a year earlier, as per the World Gold Council. However, demand for the yellow metal as an investment, rose 52% to 33.8 tonnes, on a year-on-year basis, a clear indication that Indians opted for gold ETFs over jewellery.

It is also during the same period, that is in the month of August, that the metal hit a lifetime high of Rs 56,191 per 10 grams. In comparison, prices hovered near Rs 38,000 per 10 grams in November 2019.

As per data from the Association of Mutual Funds in India (AMFI), the number of folios in gold ETFs, rose from 3.77 lakh in October 2019, to 7.82 lakh in October 2020.

This is because investing has been simplified for Indian investors, thanks to improved adoption of digital modes to invest and transfer funds. One can start investing in gold for as less as one rupee armed with a smartphone, internet connectivity and a bank account with internet banking access.

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Disclaimer

The article is purely informational and is not a solicitation to buy, sell in securities mentioned in the article. Greynium Information Technologies Pvt Ltd, its subsidiaries, associates and the author do not accept culpability for losses and/or damages arising based on information in this article.

About the author

Olga Robert is an M.Com graduate covering equity markets and personal finance for nearly three years. Her interests include tax planning, equities, DIY personal finance management and government schemes.