Friends, it's been some time since I posted on traderji, although I have been visiting the forum.
I was planing to invest some money in gold and was pondering over the options. Everyone is talking about gold ETFs and e gold but I am thinking why these and why not physical gold? The reason being, I had purchased some gold coins a few weeks back from a jeweller in Bangalore. I paid that days gold price plus 1% premium and another 1% VAT. If I sell it back to him he ll pay me Rs. 25 less per gram to that days price. So the additional charges incurred are just 2% plus Rs. 25 per gram loss that I inciur while selling it. At the max it comes to 2.5% additional charges may be 3%.
If I buy ETF, I pay 1% fee year to the fund management company. If I plan to keep gold for more than 3 years ETF seems to be a more expensive option.
Now e gold works out cheaper than etf and gives additional benefit of converting the units to physical gold but the price of e gold on nsel is typically 150-200 rs more than good prices at current market . So if I plan to convert my e gold to physical gold later on I lose out on this difference plus I need to pay VAT also.
Under these circumstances I was wondering is nt it more advisable to go for physical gold in form of coins or bullions instead of paper or electronic gold specially if u plan to hold it for some time?
Views please..
I was planing to invest some money in gold and was pondering over the options. Everyone is talking about gold ETFs and e gold but I am thinking why these and why not physical gold? The reason being, I had purchased some gold coins a few weeks back from a jeweller in Bangalore. I paid that days gold price plus 1% premium and another 1% VAT. If I sell it back to him he ll pay me Rs. 25 less per gram to that days price. So the additional charges incurred are just 2% plus Rs. 25 per gram loss that I inciur while selling it. At the max it comes to 2.5% additional charges may be 3%.
If I buy ETF, I pay 1% fee year to the fund management company. If I plan to keep gold for more than 3 years ETF seems to be a more expensive option.
Now e gold works out cheaper than etf and gives additional benefit of converting the units to physical gold but the price of e gold on nsel is typically 150-200 rs more than good prices at current market . So if I plan to convert my e gold to physical gold later on I lose out on this difference plus I need to pay VAT also.
Under these circumstances I was wondering is nt it more advisable to go for physical gold in form of coins or bullions instead of paper or electronic gold specially if u plan to hold it for some time?
Views please..