Gold at Record Highs: What Beginners Must Know Before Buying

With gold prices at record highs, it is seen as a safe investment during global uncertainty. Beginners have several investment options: physical gold, digital gold, Gold ETFs, and Gold Mutual Funds, each with distinct advantages and risks.

Gold prices are breaking all-time records and moving forward. As the price touches new highs with each passing day, those who wish to invest in gold for the first time are very confused. Is it profitable to buy when the price is this high? What are the ways to invest in gold? The things beginners must know are as follows.

When does the price of gold increase?

Gold becomes popular as a safe investment when there is uncertainty in the global market. Investors turn to gold during wars, economic crises, and inflation. However, beginners should remember that gold does not provide a monthly income like stocks or bonds. Profit is only made through the increase in its value.

What is the best way to invest?

1. Jewelry, Coins: The advantage is that you can hold gold directly. However, you will have to pay making charges. This will reduce the profit when you sell it later. Also, security issues for storage and insurance costs must be considered.

2. Digital Gold: You can buy gold even for small amounts through mobile apps. Companies store it in insured lockers. However, in India, digital gold is not under the direct regulation of agencies like SEBI. There is a slight risk of losing the investment if the companies face financial collapse.

3. Gold ETF: This is a way to invest in gold through the stock market. A Demat account is required for this. It is safe as it is regulated by SEBI. Its value will change according to the price of physical gold.

4. Gold Mutual Funds: This is a suitable way for those without a Demat account to invest in gold. You can join this through an SIP for a small amount. Like other mutual funds, this is also safe and transparent.

Tax laws have changed

Tax on profits from gold investment. According to the new law:

You have to pay a 12.5 percent tax on the profit you get when you sell gold after 24 months (two years) of buying it. Previously, this was 36 months. Also, note that the indexation benefit is no longer available.

Some advice for beginners

Instead of investing a large amount at once when the price is at a record high, it is better to invest in small amounts at intervals (SIP method). Set aside only 5 to 10 percent of your total investment for gold. In the long run, gold will always be a safe investment.