Physical Gold Compare

Additional Useful Information

• Physical gold can be purchased based on the weight of the gold being bought. There are several denominations of the weights that can be bought. They include 0.5g, 1g, 5g, 10g etc.

• Physical Gold with different purities can be purchased. The purer the gold, the costlier it is. This purity is measured in carats. The highest purity gold is 24 carats. For example, 18 carats would be cheaper to buy compared to 24 carats.

• Gold prices vary daily depending on various factors such as demand & supply related to inflation, geopolitical uncertainties etc.

• Physical gold is not regulated by government like in the case of securities. It also requires careful and secure storage.

• Gold coins and bars are a more efficient way of investing as compared to gold jewellery. That is because, gold jewellery has additional design and making costs as well.

Returns *

• Physical Gold does not guarantee returns, investing in Physical Gold is considered as a good hedge against inflation.

• Over a ten-year period, investing in Physical Gold has resulted into a return of 8% to 10% per annum.

Risk Level

• Physical Gold is considered as a low-risk investment.

• Gold prices are dependent on the state of the economy. In an inflationary environment, gold prices rise while during a period of low inflation, gold prices are stable or decrease. It is important to analyse the state of the economy before deciding on purchasing Physical Gold.

• It is also important to gauge and verify the purity of Physical Gold before purchasing it.

Liquidity

• Physical Gold is considered liquid. That is because it can be easily sold at any time at prevailing gold prices.

• At any time, investors can liquidate their holdings by selling their Physical Gold to a dealer. Generally, Physical Gold transactions are carried out by dealers. Dealers can include individual dealers or jewellery stores.

Interesting Facts

• Holding Physical Gold may involve storage costs (such as purchasing a safe or renting bank lockers).

• Investing in Physical Gold requires less paperwork as compared to gold in other forms such as gold ETFs, gold mutual funds etc. which require opening a Demat Account.

• Physical Gold is considered to be a good investment in times of market stress and economic uncertainties. It is a good inflation hedge, which means that gold prices rise in an inflationary environment.

• Physical Gold is also considered to be auspicious in India.

Tax Implications

• Earnings received from Physical Gold are taxable.

• When investors sell Physical Gold, the difference between the Sale Amount and Purchase Amount is typically called “Capital Gain” or “Capital Loss” (if sale amount is lesser than the purchase amount).

• The tax that the investor must pay on Capital Gain is –
• Situation 1 – If the Physical Gold is sold within a period of 2 years from investment, the Capital Gains earned (called Short Term Capital Gains) are added to the taxable income of the investor and taxes are required to be paid based on the applicable tax slab.
• Situation 2 - If the Physical Gold is sold after a period of 2 years from investment, the Capital Gains earned (called Long Term Capital Gains) are taxed at 12.5% on the gains.

• There is no tax in case of “Capital Loss”.

Where To Invest

• https://www.safegold.com/?redirect=false