Gold has always been valued for its beauty, rarity, and long-standing role as a stable investment. Throughout history, it has given positive returns, making it a popular choice for those looking to protect and grow their wealth. In India, gold holds significant cultural importance, with women owning around 24,000 tons of gold in jewelry—about 11% of the world’s gold reserves, according to the World Gold Council.
While physical gold continues to be a trusted asset, things are changing. With the rise of technology, digital gold has started to gain attention as a modern way to own gold. Despite its growing popularity, there are still many myths surrounding it. In this article, we’ll take a closer look at these myths and provide a clearer understanding of what digital gold really is. Let’s get started.
Demystifying The Myths About Digital Gold
What is Digital Gold?
Digital gold is a modern way to buy gold online, making it easier and more affordable for people who want to invest in gold. It’s a convenient option for those who prefer not to go through traditional methods.
When you buy digital gold, you’re actually purchasing real 24k gold that’s stored securely in a vault, with your name attached to it. The gold is managed by one of three trusted gold banks in India: Augmont, MMTC – PAMP, or SafeGold.
One of the best things about digital gold is how simple it is to use. With just a few clicks on an app, you can buy, sell, or even have physical gold delivered to your home. What’s even better is that there’s no minimum purchase amount. You can start with as little as ₹10, making it an accessible option for those who are just starting to invest or want to keep their investments small and steady. This makes digital gold a great choice for people looking to make regular, small investments without breaking the bank.
Demystifying The Myths About Digital Gold
Digital gold has gained a lot of attention, but with that comes a few myths that need to be cleared up. Let’s break them down.
Myth #1: Gold is Too Expensive and Only the Wealthy Can Invest in It
This isn’t true at all! One of the best things about digital gold is that you can start investing with as little as ₹10 using digital gold investment apps. Gold, once seen as something only the wealthy could afford, is now accessible to just about anyone. It’s an affordable way to invest in a precious metal that’s been valuable for centuries. We love how it’s made available to everyone, no matter their budget.
Myth #2: Digital Gold Isn’t as Pure as Physical Gold
Actually, the opposite is true. With digital gold, you’re getting gold directly from the source without the involvement of any middlemen, which could sometimes affect the purity. Traditional gold dealings often involve multiple steps where the purity might be compromised, either intentionally or due to human error. With digital gold, the process is streamlined, ensuring you get the best quality gold possible. Plus, it’s backed by trusted platforms that offer a guarantee of purity.
Myth #3: Investing in Digital Gold is Risky
Like any investment, digital gold comes with its own set of risks, but it’s important to understand that those risks are often much lower than with more volatile options like stocks. Gold has always been a stable investment, especially in times of inflation or economic uncertainty. Unlike stocks, gold tends to hold its value over time and is in constant demand worldwide. It’s also a great way to hedge against other riskier investments, making it a safe, steady addition to your portfolio.
Myth #4: Digital Gold isn’t Real Gold
Actually, it is real gold! Usually when your balance reaches 0.5 grams, you have the option to convert it into physical gold—whether it’s coins or jewelry. You can also easily withdraw or convert your digital gold into physical gold and have it delivered right to your doorstep, all through the app you use.
Myth #5: The Returns From Gold Don’t Beat the Interest Rate
Many people believe that gold isn’t a great investment because its returns don’t match those of stocks or other investments. While it’s true that some stocks can offer higher returns, they also come with higher risks and no guarantees. Gold, on the other hand, is much more stable in terms of price growth. Over time, it tends to increase in value, making it a solid option for balancing your portfolio and protecting against inflation.
Gold has been historically considered a safer, more reliable investment compared to other options like diamonds or platinum. Unlike these, gold tends to hold its value better, making it a popular choice for investors.
Myth #6: Buying Digital Gold is Complicated
Traditional gold buying involves visiting stores and dealing with various steps, which can be a hassle. Digital gold, however, simplifies the process. All you need is a phone, an internet connection, and a few easy steps to get started. The rest of the process happens automatically behind the scenes, making it far more convenient and less time-consuming.
Myth 7: Digital Gold Is Heavily Taxed
A common misconception is that digital gold is taxed more than physical gold, but the tax rules are the same for both. When you sell digital gold, capital gains taxes apply based on how long you’ve held it. If you’ve kept it for more than three years, you pay long-term capital gains tax, which is lower. If it’s been less than three years, short-term capital gains tax applies. So, while digital gold does come with taxes, it’s no different from physical gold in that sense.
Closing Thoughts
Digital gold is making gold investment more accessible and convenient for everyone, regardless of budget. It’s a reliable way to own real gold without the hassle of traditional methods. Despite the myths, digital gold offers a straightforward, secure, and affordable option for those looking to invest in a timeless asset. So, if you’re considering adding gold to your portfolio, digital gold might just be the perfect fit.
