In today's world, there are various ways to invest in gold. One of these options is paper gold, which allows investors to purchase a digital certificate that represents a portion of physical gold stored at a secure facility. This form of investment offers many advantages over buying physical gold outright, including more convenient trading and greater liquidity. In the section below, we will discuss the paper gold investment in detail.
Published on 03 February 2023
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Paper Gold Meaning
Paper gold is an investment instrument backed by physical gold reserves. It allows investors to invest in gold without having to store it physically. Paper gold investments are available through various financial instruments, such as derivatives, certificates, and exchange-traded funds (ETFs).
Unlike physical gold bullion, paper gold does not require keeping the metal in your possession. Instead, you hold paper evidence of ownership. This makes paper gold an attractive option for those who want to take advantage of the potential upside of investing in precious metals without dealing with the hassle of storing and insuring actual bullion.
Different Ways to Invest in Paper Gold in India
You can invest in paper gold in India in various ways. Here are the most common ways:
1. Digital Gold
Digital gold or paper gold is a term used to describe precious metal investments typically made online or through digital platforms. This form of investing in gold allows investors to securely purchase, store and transact with gold and other precious metals without needing physical ownership or storage.
2. Sovereign Gold Bonds (SGBs)
Sovereign Gold Bonds (SGBs) are paper gold investments issued by the government of India. The bonds provide investors with an alternative way to invest in physical gold without worrying about storage or security risks.
These bonds are issued at a nominal rate of 2.5% over and above the prevailing market price of gold, making them an excellent option for long-term investment. SGBs are tradable on stock exchanges and can be held till maturity or traded in the secondary market.
3. Gold Mutual Funds
Gold mutual funds are one of the most popular ways to invest in paper gold, offering investors an easy alternative to buying physical gold. Paper gold does not require storage and insurance costs, unlike physical gold, since it is not a tangible asset. The underlying assets of a gold mutual fund are typically shares of companies involved in the production, exploration, and sale of gold.
By investing in these companies, you will indirectly receive exposure to gold price movements, which can provide diversification benefits for your portfolio.
4. Gold Electronic Traded Funds (ETFs)
Gold Electronic Traded Funds (ETFs) are investment products that offer investors a way to invest in paper gold without having to take physical possession of the metal. ETFs track the price of gold on the spot market and can be bought or sold through regular stockbrokers. They provide investors with exposure to gold as an asset class and allow them to invest in paper gold relatively quickly and easily.
Benefits of Investing in Paper Gold
Here are some of the main advantages of investing in paper gold:
1. Liquidity – Investing in paper gold allows you to quickly and easily convert your funds into cash or other forms of currency when needed.
2. Security – Gold prices tend to remain relatively stable over time, meaning that you don’t have to worry about sudden swings in value like with stocks or bonds.
3. Low Fees – Compared to other forms of investment, paper gold has very low fees associated with it, meaning that you can save money when investing in this asset class.
4. Tax Advantages – Depending on where you live and your situation, paper gold investments may offer tax advantages such as reduced capital gains taxes or no taxes depending on the circumstances.
Physical Gold vs. Paper Gold
The primary difference between physical gold and paper gold investments lies in the extent to which you own them. You own the asset outright with physical gold, enabling you to keep it for long-term storage or even take possession of it if desired. Paper gold investments offer ownership of a pool of underlying assets but generally do not come with the same security benefits as owning real bullion.
When investing in paper gold, you essentially take a stake in a pool of gold-backed securities, such as ETFs or stocks. These investments carry risk due to their exposure to the stock market and can be subject to fluctuations in share prices. Additionally, the value of paper gold does not always equal the current spot price of actual bullion. It can be affected by various factors, such as supply/demand patterns and geopolitical developments.
The Bottom Line
Investing in paper gold is an excellent way to gain exposure to the price of gold without having to physically own it. It allows you to access a wide range of derivatives, taking advantage of different strategies and opportunities that may not be available with physical ownership.
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A commodity can be termed as an asset or a good that is essential in everyday use. Some examples of commodities include food, metals, and energy. By nature, commodities are interchangeable and alternate. It is an object that one can buy or sell, except for money and actionable claims.
The agriculture sector has been the spine of the Indian economy since prehistoric times. And given the evolution of technology and digitalisation, trading in agricultural commodities has become convenient. Today, you can trade agricultural commodities similarly like you do commodity trading for precious metals and others.
Commodities Traded and Its Types in Commodities Market
Did you know that commodities are also traded just like stocks? Did you know that there is a particular commodity market for the trade of commodities? The answer to both these questions is yes. So let us get to know more about the types of commodities traded in a commodity market.
A commodity can be termed as an asset or a good that is essential in everyday use. Some examples of commodities include food, metals, and energy. By nature, commodities are interchangeable and alternate. It is an object that one can buy or sell, except for money and actionable claims.
The agriculture sector has been the spine of the Indian economy since prehistoric times. And given the evolution of technology and digitalisation, trading in agricultural commodities has become convenient. Today, you can trade agricultural commodities similarly like you do commodity trading for precious metals and others.
Commodities Traded and Its Types in Commodities Market
Did you know that commodities are also traded just like stocks? Did you know that there is a particular commodity market for the trade of commodities? The answer to both these questions is yes. So let us get to know more about the types of commodities traded in a commodity market.
Sharekhan Comtrade Private Limited (TM) operates the web site accessible from the URL www.myespresso.com (the “web site”').
Sharekhan Comtrade Private Limited is committed to protecting your privacy and utilising technology that gives you the most powerful, safe, online experience that you can get anywhere else.
Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.Sharekhan Comtrade Private Limited does, however, gather certain information that is provided by you to the Web Site. Sharekhan Comtrade Private Limited believes that by collecting this information Sharekhan Comtrade Private Limited is able to provide you with a personalised web experience, and to assist its own sales team and advertisers in efficiently reaching an appropriate audience.
Sharekhan Comtrade Private Limited requests the minimum information it believes necessary to achieve this goal.
The following discloses Sharekhan Comtrade Private Limited's information gathering and dissemination practices for the Web Site:
System Data:
Sharekhan Comtrade Private Limited uses your IP address to help diagnose problems with our server and to administer the web site. Your IP address is used to identify you and your shopping cart and to gather broad demographic information.
Registration Data:
The Web Site's registration form may require users to give us contact information (like their name, phone number and e-mail address), unique identifiers (like their PAN Number) and demographic information (like their pin code, age or income level). The Web Site uses customer contact information from the registration form to send the users information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Comtrade Private Limited's partners. The customer's contact information is also used to contact the visitor when necessary. Unique identifiers (such as PAN numbers) are collected to verify the user's identity. Demographic and profile data is also collected at the Web Site. We use this data to tailor the visitor's experience at the Web Site, showing them contents that we think they might be interested in, and displaying the contents according to their preferences. This information is shared with advertisers on an aggregate basis.
Links and Co-Branded Sites:
This site contains links to other Web Sites which are not necessarily been screened or reviewed by www.myespresso.com. Sharekhan Comtrade Private Limited is neither responsible for the privacy practices or the contents of such Web Sites nor shall be held answerable for the inaccurate, inappropriate or offensive data, material, information, products and services that may be viewed on those sites.
Sharekhan Comtrade Private Limited may operate a number of co-branded sites. Policies regarding information collection and sharing may differ on some of these co-branded sites. If you have any particular questions, you should check the privacy statement that appears on each co-branded site.
Order Forms:
The Web Site uses an order form for customers to request information, products and services. The Web Site collects visitors' contact information (like their mobile number or e-mail address), unique identifiers (like their PAN number) financial information (like their account or credit card numbers) and demographic information (like their pin code, age or income level). Contact information from the order form is used to send orders, information about Sharekhan Comtrade Private Limited, and promotional material from some of Sharekhan Comtrade Private Limited's partners to the visitors of the Web Site. The visitor's contact information is also used to get in touch with the visitor when necessary. Financial information that is collected is used to check the users' qualifications and bill the user for products and services. Unique identifiers (such as PAN numbers) are collected from Web Site visitors to verify the user's identity.
Surveys and Contests:
The Web Site's online surveys ask visitors for contact information (like their mobile number or e-mail address) and demographic information (like their pin code, gender, age or income level). The Web Site uses contact data from its surveys to send the user information about Sharekhan Comtrade Private Limited and promotional material from some of Sharekhan Ltd.'s partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below. Demographic and profile data is also collected at the Web Site. The Web Site use this data to tailor its visitor's experience at the Web Site, showing them content that it thinks they might be interested in, and displaying the content according to their preferences. This information is shared with advertisers on an aggregate basis.
Sharekhan Comtrade Private Ltd run contests on the Web Site in which we ask visitors for contact information (like their e-mail address). Sharekhan Comtrade Private Limited uses contact data from its contests to send users information about Sharekhan Comtrade Private Ltd. and promotional material from some of our partners. The customer's contact information is also used to contact the visitor when necessary. Users may opt-out of receiving future mailings; see the choice/opt-out section below.
Third-Party Advertisement Servers:
Sharekhan Comtrade Private Limited engages the services of an outside advertisement company to display advertisement on the Web Site. These advertisements may contain cookies. While Sharekhan Comtrade Private Limited uses cookies in other parts of the Web Site, cookies received with banner advertisements are collected by the Advertisement company, and Sharekhan Comtrade Private Limited does not have access to this information.
Protection of your Data and Information:
The privacy and protection of your data and information provided to us is of vital importance. Sharekhan Comtrade Private Limited shall ensure to safeguard the security and confidentiality of any information you share with us. Any personally identifiable information of the customers obtained by us shall not be used or shared other than for the purposes to which the customers consents. However security and confidentiality of information cannot be guaranteed cent percent. Hence despite our utmost efforts to protect your personal information, Sharekhan Comtrade Private Limited and www.myespresso.com cannot warrant the security of any information you transmit to us through our online services. Such transmission of your personal information is done at your own risk.
Disclosure of Customer Information :
Sharekhan Comtrade Private Limited and www.myespresso.com shall not deliberately disclose customer's personally identifiable information to any unauthorized third person, save and except where such information shall be disclosed in good faith and for the purpose of law for the time being in force or to protect the rights and property of Sharekhan Comtrade Private Limited and www.myespresso.com.
Public Forums :
The Web Sites makes chat rooms, forums, message boards and/or news groups available to its users. Please remember that any information that is disclosed in these areas becomes public information and you should exercise caution when deciding to disclose your personal information.
Supplemental Information :
The Web Site supplements the information that you provide with information that is received from third parties.
The Web Site DOES NOT entice by the prospect of a special game, prize or other activity, to divulge more information than is needed to participate in the activity.
Further to the above, in light of the recently notified Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011. (Hereinafter referred to as the Rules)
The following shall be deemed to be sensitive information :
Password;
Financial information such as Bank account or credit card or debit card or other payment instrument details;
Physical, physiological and mental health condition;
Sexual orientation;
Medical records and history;
Biometric information;
Any detail relating to the above clauses as provided to body corporate for providing service; and
Any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise:
provided that, any information that is freely available or accessible in public domain or furnished under the Right to Information Act, 2005 or any other law for the time being in force shall not be regarded as sensitive personal data or information for the purposes of Rules.
Collection of Information:
Compliance with KYC guidelines as per SEBI / Exchanges / Or any other Act, law or regulation requiring the same and any internal KYC guidelines formulated by Sharekhan Comtrade Private Limited.
In order to provide enhanced trading experience to the client.
In order to provide any further information to be provided to regulators.
Such information may be collected in a manner that the client is always aware of the collection and purported usage of the same. The client shall have an option to withdraw consent to share the information. However such intimation shall be required in writing. Such intimation shall only be taken into account from the date on which the same is received. Sharekhan Comtrade Private Limited may choose to stop services to such a client in case such intimation is received. Such information shall only be used for the purpose it is collected.
Clients would be allowed an option not to disclose any information to be collected, provided the same is in compliance with regulatory requirements.
Disclosure of information:
Disclosure of sensitive information would be as per the terms agreed by the clients. For any change in such terms, the clients would be informed.
Provided no consent may be required in case the same is being shared as per compliance guidelines or as required by regulators.
Any information being disclosed to third parties would be in accordance with the Rules and would be done provided such third party has the same level of compliance guidelines as Sharekhan Comtrade Private Limited.
Sharekhan Comtrade Private Limited shall allow clients to review their personal information and the same shall be allowed to be edited provided exchange guidelines relevant to the same are followed.
Sharekhan Comtrade Private Limited shall maintain reasonable security practices and procedures and maintain a comprehensive documented information security programme. In the event of an information security breach, Sharekhan Comtrade Private Limited or a person on its behalf shall be required to demonstrate as and when called upon to do so by the agency mandated under the law, that there have implemented security control measures as per their documented information security programme and information security policies and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business.
KYC Languages
Download Client Registration Documents (Rights & Obligations, Risk Disclosure Document, Do's & Don't's) in Vernacular Language :
Note: "This document is a translated version of the client registration documents in English and is being provided in vernacular language to facilitate better understanding by the investors. In case of any ambiguity, the contents of the English version would prevail."
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By accepting the Terms & Conditions, you authorise Espresso, its representatives and agents to provide information about various products, offers and services provided by Espresso through any mode, including telephone calls, SMSes, emails, letters and any other mode of communication. You also confirm that laws in relation to unsolicited communication referred in "National Do Not Call Registry" as laid down by "Telecom Regulatory Authority of India" will not be applicable for such information/communication.
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