Buying Gold This Dhanteras? Smarter Ways To Invest In Gold Coins, Alternative Gold Investment

Dhanteras 2024: Leading banks, including SBI, HDFC Bank, Bank of Baroda, ICICI Bank, and Union Bank of India, have launched gold coins under the RBI authorisation

Dhanteras 2024: Dhanteras continues to draw traditional gold investors, with 10 grams priced at Rs 78,245, according to the Indian Bullion Jewellers Association (IBJA). Despite high costs, the allure of gold coins, especially through trusted banking channels, remains strong. As Dhanteras brings gold investment into the spotlight, buyers weigh tradition with modern financial insights, exploring secure and diverse avenues to protect and grow their wealth this Diwali.

Banks Enter Gold Market with 24K Coins

Leading banks, including State Bank of India (SBI), HDFC Bank, Bank of Baroda, ICICI Bank, and Union Bank of India (UBI), have launched gold coins under the Reserve Bank of India (RBI) authorisation. These coins, offered in 2, 5, 8, and 10-gram denominations, bear the respective banks' logos and are marketed as secure investments. Each gold coin is certified for 24K purity and comes in tamper-proof packaging. Customers can conveniently order online or through bank apps, with purchases requiring a PAN card and a simple application form.

UBI and several other banks extend gold coin sales to non-customers, accepting cash for amounts under Rs 50,000. For higher amounts, cheques or demand drafts are required, adding convenience for investors looking to buy without opening new accounts.

Premium Pricing and Limited Resale Options

While bank gold coins offer security and purity assurance, financial advisor Donald Gonsalves of SimplePath cautions buyers about the premium — up to 10 per cent over the standard market rate — citing additional costs for certification and secure packaging. This can make bank gold coins less competitive for pure investment purposes.

Furthermore, investors looking to resell may face challenges, as banks are prohibited from buying back gold coins due to RBI policy. This limitation often drives sellers to local jewellers, where prices may not match their initial purchase rates, posing potential losses.

Alternative Gold Investment Options

With the limitations of physical gold, alternatives are attracting savvy investors:

Gold Exchange-Traded Funds (ETFs): Traded on major exchanges like NSE and BSE, gold ETFs offer liquidity and transparency, allowing investors to buy and sell easily through demat accounts. Key considerations include fund size, liquidity, tracking error, and expenses.

Digital Gold: This form enables investment starting from Rs1 without physical handling or storage. With transactions managed digitally and gold stored in secure vaults, it provides flexibility and quick liquidity, appealing to tech-savvy investors.

Sovereign Gold Bonds: For those seeking stability, sovereign gold bonds issued by the government provide 2.5 per cent annual interest. However, with fresh issuances on hold, investors can only access them through the secondary market, where prices can fluctuate above face value and liquidity may be limited.