Why buy gold and spend on making and storage costs when you can digitally invest in them?
With the advent of the latest technology in the world of investing, there are now different ways to invest in gold. And the two asset classes we will be discussing in this blog are Digital Gold and Gold ETFs.
These assets offer the convenience of investing in gold without the hassle of buying physical gold. As a matter of fact, they came into place to make lives easier for people who are interested in gold investments. In this blog, we will compare Digital Gold vs Gold ETF and explore the pros and cons.
Digital Gold
If you want to virtually buy Gold, then you can opt to buy Digital Gold. The buying process is simple. You can invest in Digital Gold with an asset provider, and they save the physical form of the gold in vaults.
Pros of Digital Gold:
- Affordability: Digital Gold allows investors to purchase gold in small fractions, making it more affordable than buying physical gold.
- Convenience: Investors can easily buy and sell Digital Gold online without the need to opt for vault services for storage.
- Accessibility: Digital Gold can be bought and sold 24/7, making it accessible to investors all around the world.
- Security: Digital Gold is generally more secure than physical gold. They are stored in secure vaults by asset providers, reducing the risk of theft or loss.
Cons of Digital Gold:
- Lack of Tangibility: Digital gold is intangible, which means investors do not physically own the gold they have invested in.
Gold ETFs
Gold ETFs are exchange-traded funds that invest in gold bullion or gold-producing companies. The value of a gold ETF is directly tied to the price of gold, and investors can buy and sell gold ETFs on stock exchanges, just like any other stock.
Pros of Gold ETFs:
- Diversification: Gold ETFs offer investors exposure to the gold market without the need to invest in physical gold.
- Liquidity: Gold ETFs are highly liquid, making it easy for investors to buy and sell them on stock exchanges.
- Low Cost: Investing in gold ETFs is generally cheaper than buying physical gold. Mainly because investors do not have to pay for storage or insurance.
- Transparency: Gold ETFs provide investors with transparency as they disclose their holdings regularly, allowing investors to see what they are investing in.
Cons of Gold ETFs:
- Counterparty Risk: Investors in gold ETFs are exposed to counterparty risk. They rely on the ETF provider to hold the gold on their behalf.
- Volatility: The price of gold ETFs can be volatile. Investors may experience significant fluctuations in the value of their investments.
- Management Fees: Investors in gold ETFs have to pay management fees, which can eat into their returns over time.
Conclusion
Digital gold is more affordable and convenient, while Gold ETFs offer investors diversification and liquidity. Although the choice is yours in opting between Gold ETF and Digital Gold, the choice has to be a well-thought-out and calculated investment. If you are leaning towards Digital Gold, check out Fello’s Digital Gold offering. The best part about Fello is, you can play games on the application and earn rewards in the form of Digital Gold. Download the app now, https://fello.in/
