By Dr Samir Kapur, a trainer conducting finance for non finance managers programmes in various management colleges and for various SMEs and MSMEs. He has a MBA and PHD in Finance
Closer to home, every Indian household you can think of, since time immemorial, has been investing in Gold and continue to do so even to this day. In fact, during festivals like Dhanteras and Diwali, the demand for bullion sky-rockets. The reason is rather simple – it’s safe, the value keeps growing at a consistent rate, and therefore is an ideal instrument for anyone looking to invest in an asset for long-term growth.
While Gold will never lose its lustre, alternative ways of investing in Gold are gradually emerging, thanks to the digital era that we are living in. Yes, Digital Gold is the future because of the safe haven it promises to everyone who wants to put their money on it. It is interesting to note here that, unlike cryptocurrencies and NFTs, Digital Gold is the only asset-backed commodity, backed by 24K 999.9 Purity Certified Gold and sold by renowned, reliable and organised entities such as MMTC-PAMP, a joint venture between MMTC Ltd (Metals and Minerals Trading Corporation of India), a government of India undertaking, and Switzerland based bullion brand, MKS PAMP.
As the largest player in the market, MMTC-PAMP allows anyone to invest in 24k 999.9 purity certified physical gold through online transacting platforms for as low as Rs 1/- as opposed to paper gold like ETFs and SGBs that have a higher entry point, and ETFs, which require a Demat account. For each online purchase, the corresponding weight of physical gold is shifted to secured vaults under the direct ownership of the consumer, corroborated through a digital certificate captured in the investor’s preferred app/intermediary’s online platform.
Of late, young Millennials and Gen Z investors in particular have been moving in large numbers toward the asset class. Digital Gold has become the favoured and viable form of investment for digital-first investors because of the flexibility, simplicity and security it delivers to its users, making it a safe and straightforward option to protect one’s investment portfolio from volatile markets. As a consequence, Millennials, many of whom grew up with parents and grandparents who saved and invested in physical gold coins, are now turning to digital gold to continue the family legacy of saving and investing for retirement. Considering the increasingly unprecedented and uncertain times that we are living in, there can be no perfect time rather than now, to invest in aurum.
Digital gold is basking in its glory because it is a highly safe and secure online investment tool that enables individuals to easily acquire certified 24-karat pure gold. Unlike jewellery, there are no making charges associated with buy/sell transactions. Additionally, investors have the option of liquidating their assets 24 hours a day, 7 days a week, at real-time prices, all with a single click.
Owing to the fact that MMTC-PAMP owns and runs the biggest gold ecosystem in the nation, investors wouldn’t have to worry over the storage, security, and (re)sale as the firm provides end-to-end service to customers, facilitating them to convert their Digital Gold holdings in 24K 999.9 purity certified physical gold SKUs. It’s due to these benefits that Digital Gold has found its way as one of the most favoured investment options for today’s digital-natives.
With the growing popularity of new-age digital investment instruments, the capital market regulator, SEBI, has been vocal in its desire to safeguard the interests of consumers and investors. Its recommendations are a step in the right direction in terms of formalising the Digital Gold industry and protecting investor and consumer interests, but there is still more work to be done in order to capitalise on the commodity’s potential.
Digital Gold remains the only product that has the potential to significantly accelerate the financialization of gold, assiduously capturing the heart of the avid investor, and the Indian middle class. Organised players with standardised credentials will have to take the onus of developing this category further. Their active participation will boost investor confidence and cement Digital Gold’s position as the investment instrument of the future.