Question 1

Why do people invest in gold?

Accepted Answer

Gold is often considered a "safe-haven" asset, meaning its value tends to hold up or even increase during times of economic uncertainty, inflation, and geopolitical instability. It also offers portfolio diversification, as its price movements often have a low correlation with stocks and bonds.

Question 2

What are the main ways to invest in gold in India?

Accepted Answer

In India, you can invest in gold through various forms: physical gold (jewellery, coins, and bars), Gold Exchange-Traded Funds (ETFs) which are digital units representing physical gold traded on stock exchanges, Sovereign Gold Bonds (SGBs) which are government securities denominated in grams of gold issued by the RBI, digital gold platforms where you can buy and store gold digitally, and gold mutual funds that invest in gold ETFs or gold mining companies.

Question 3

Is gold a good long-term investment?

Accepted Answer

Historically, gold has proven to be an effective hedge against inflation and a protector of wealth over the long term. While its short-term prices can be volatile due to global economic conditions, interest rate changes, and geopolitical events, its value tends to grow steadily over extended periods, making it suitable for long-term wealth preservation.

Question 4

What are the risks associated with gold investment?

Accepted Answer

The primary risks include price volatility, where short-term fluctuations can occur. Unlike stocks or bonds, physical gold does not generate passive income (dividends or interest), so returns depend solely on price appreciation. For physical gold, there are also storage and security concerns, which may involve costs like locker fees and the risk of theft. Additionally, physical gold jewellery may have non-recoverable making charges and purity can be a concern.

Question 5

How is gold investment taxed in India?

Accepted Answer

In India, if gold is sold within 24 months of purchase, the gains are considered Short-Term Capital Gains (STCG) and are added to your income, taxed at your applicable income tax slab rate. If gold is held for more than 24 months, the gains are considered Long-Term Capital Gains (LTCG) and are taxed at 20% with indexation benefits. However, capital gains on redemption of Sovereign Gold Bonds (SGBs) at maturity are exempt from tax, though the interest earned on SGBs is taxable as per your income tax slab. For Gold ETFs and gold mutual funds purchased after April 1, 2023, all gains are now taxed as short-term capital gains, irrespective of the holding period.

Question 6

I have more questions — how can I contact you?

Accepted Answer

You can reach us via email at contact@vgrgold.com, or use the Contact Us page for support. Our team is happy to assist you!

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