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E-GOLD
Since the beginning of time, gold has had a special place in history. It has been used to build religious idols, settle political differences, honor monarchs, demonstrate affection, serve as currency and, more recently, has been used for commercial processes. Until 1971, the U.S. dollar was backed by gold, which is still held by central banks around the world for use in times of emergency. It also holds promise for traders - if they can find the trend in this often volatile commodity.
Gold ETFs
Gold ETFs are mutual fund schemes that invest only in gold. Thus it is as good as holding gold; except that it is held electronically. Generally 1 unit of Gold ETF is roughly equivalent to 1 gram of gold and hence its price is also roughly equal to price of 1 gram of gold. You can buy a minimum of 1 unit of Gold ETF.
E-Gold
Launched recently by the National Spot Exchange, e-gold is also an electronic form of holding gold - except that herein you are directly the owner of gold whereas in Gold ETF the Asset Management Company is holding the gold. Unlike Gold ETF, e-Gold also offers the facility of physical delivery. However, given the additional costs involved viz. delivery charges, VAT and octroi, it may be better not to opt for physical delivery.
E-GOLD
E-GOLD
Looking at the Indian tradition and culture most of common man are attached to gold in various forms i.e. gold coins, bars, jewelry, etc. You would invest in gold to hedge against rising inflation cost or for short term to earn some profit in rising gold prices. Now-a-days while investing in gold retail investors take into consideration the liquidity, cost, quality and security of this gold as an investment. But, its difficult to answer which option is best while investing in gold among various alternatives and how secure your investment is?? To benefit investors in gold National Spot Exchange Limited (NSEL), India has come up with the handsome solution for the problem mentioned above by offering E-series to invest in gold. In this, Indian retail investor can trade in commodities especially precious metal like gold in e-form. Like equities one can keep their gold in demat form, which not only saves on insurance cost and locker rent but also invest in small denominations.
ETF
Because it trades like a stock, an ETF does not have its net asset value (NAV) calculated every day like a mutual fund does. By owning an ETF, you get the diversification of an index fund as well as the ability to sell short, buy on margin and purchase as little as one share. Another advantage is that the expense ratios for most ETFs are lower than those of the average mutual fund. When buying and selling ETFs, you have to pay the same commission to your broker that you'd pay on any regular order.
ETF-GOLD
Gold- Exchange Traded Funds (ETFs)
Each share of these specialized instruments represents a fixed amount of gold, such as one-tenth of an ounce. These funds may be purchased or sold in any brokerage or IRA account just like stocks. This method is therefore easier and more cost effective than owning bars or coins directly, especially for small investors, as the minimum investment is only the price of a single share of the ETF. The annual expense ratios of these funds are often less than 0.5%, much less than the fees and expenses on many other investments, including most mutual funds.
ETF VS E-GOLD
CONCLUSION
The current average daily turnover of E-Gold being Rs 200-250 crore compared with Rs 15-20 crore in case of gold ETFs
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