Golden Opportunities: How Indian Retail Investors Trade Gold Online15-min read

Ali Raza

Ali Raza |  Updated on 20/9/2023

Intriguingly, it is estimated that Indian housewives hold an astonishing 11% of the world’s total gold supply, a cache exceeding the reserves of Switzerland, Germany, the USA, and even the International Monetary Fund combined. The profundity of such a statistic illustrates the deep-seated resonance of gold in the Indian psyche. It stands as a testament to the faith placed in this eternal asset, inspiring a new generation of investors keen to understand the ins and outs of acquiring gold online.

CoinBharat artwork of a legendary Indian beauty adorning gold and silver jewellery in a very elegant and striking fashion

Gold Price Analysis: Seizing Opportunities in a Shifting Market

The recent decision by the United States Federal Reserve to pause its long interest-rate hiking cycle has had an impact on gold prices, which have experienced a decline. While higher interest rates typically affect non-yielding assets like gold negatively, the Fed’s announcement did not provide the expected support to the market. Instead, it revealed that this pause is more of a ‘hawkish pause,’ indicating that the central bank intends to assess the effects of previous rate increases before proceeding with further hikes.

This cautious approach from the US central bank explains the slip in the gold market. Although investors hoped for an end to the monetary tightening cycle in the US, it appears that most other central banks worldwide are still engaged in their own tightening measures due to persistent inflationary pressures.

However, the gold market is likely to find support from the ongoing concerns surrounding inflation. While the effectiveness of gold as a hedge against rising prices is a matter of ongoing economic debate, many investors firmly believe in its utility. Notably, gold prices have remained relatively high despite higher interest rates across the board.

Various geopolitical factors also contribute to the attractiveness of gold as a haven asset. The situation in Ukraine, tensions in the South China Sea, and uncertainties surrounding the post-COVID recovery all add to the demand for perceived safe-haven investments.

Looking ahead, there are further event risks to consider. US retail sales and sentiment data could significantly impact interest rate expectations, thereby influencing the trajectory of gold prices.

It’s crucial to navigate this shifting market wisely and seize the potential opportunities it presents.

In This Guide:

  1. Why Invest in Gold? – An exploration into the compelling reasons behind gold investment
  2. How to Buy Gold in India in June 2023 – A contemporary guide to online gold acquisition
  3. Understanding Gold Investment Options – A study into the variety of gold-based assets
  4. Step-by-Step Tutorial: How to Invest in Gold Through an Online Broker – A detailed walkthrough, with visuals
  5. Tips for Investing in Gold – Practical advice to augment your investment strategies
  6. Projections – Stay informed with the latest in gold market trends
  7. Conclusion – Summarising the world of gold investments
  8. FAQs – Addressing commonly asked questions

Why Invest in Gold?

Comprehending the rationale for investing in gold, be it through the means of sovereign gold bonds or tangible assets, calls for an understanding of the profound historical, economic, and cultural prominence this illustrious metal commands. From the dawn of civilisation to the digital age, gold’s enduring stature as a prized possession has remained unscathed. The preservation of its value, in comparison to other investment vehicles, has been, quite simply, unparalleled. Conventional forms of currency, encompassing paper money and non-precious metal coins, have time and again been usurped, while gold continues to stand the test of time.

Spanning several millennia, gold’s resilience is credited to its unparalleled properties. It defies corrosion, readily melts under heat, and its unique sheen is immediately recognisable, thereby universally acknowledged as a reliable store of value. In modern economic situations, even the most formidable currency – the US dollar – has exhibited susceptibility to market forces. In striking contrast, gold exemplifies tenacity, retaining its worth steadfastly despite market volatilities.

CoinBharat artwork of an Indian woman adorning gold jewellery

In the rich tapestry of Indian society, gold’s importance surpasses mere economic considerations and is deeply woven into cultural mores and rituals. Revered as auspicious, it is traditionally gifted on momentous occasions and forms an integral part of many sacred ceremonies. Consequently, the demand for gold transcends investment horizons, permeating societal norms and thereby adding an extra cushion to its value. Moreover, gold acts as a formidable defence against inflation. In phases when living costs spiral, gold typically reflects this surge rather than capitulating to the infirmities of currency. Gold’s protective prowess also extends to periods of deflation, episodes marked by diminishing prices, contracting business activities, and oppressive debts. The Great Depression of the 1930s, the financial crisis of 2008, and the post-COVID economic crunch serve as fitting illustrations. Despite these turbulent economic landscapes, gold’s worth has consistently demonstrated resilience, validating its reputation as a secure investment.

Amid geopolitical uncertainties, gold’s steadfastness is unwavering. Its demand endures, affording investors the added convenience of liquidity, making it readily convertible into cash when necessary. Familiarising oneself with the process of purchasing gold bonds can provide a stable and robust asset to diversify one’s investment portfolio. Such diversification can shield investors from market volatility and preserve their wealth in the long run.

Hence, investing in gold, considering its historical value conservation, cultural significance, inflation buffering capacity, and deflation protection, holds the potential for substantial returns. Like an unyielding guardian, gold’s value stands firm, offering its investors a sense of security and reliability that is hard to find elsewhere. It emerges as an investment that one can invariably rely upon, a golden touchstone in a fluctuating financial world.

How to Buy Gold in India in June 2024

If you wish to learn how to buy gold online, the first thing to do is to find the right broker for the job. India has plenty of available brokers that will let you buy gold online, and after reviewing most of them, we have narrowed down the list to two platforms — Admiral Markets and Libertex.

Admiral Markets Review

Admiral Markets Review

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Pros

  • list bullet Over 40,000 active clients from 110+ countries, carrying out an average of 1.5 million trades per year.
  • list bullet Competitive spreads as low as 0.5 pips and up to 500:1 leverage for forex trading.
  • list bullet Provides access to over 8,000 trading instruments, including 40+ forex pairs, 200+ stocks, and 5+ cryptocurrencies.

Cons

  • list bullet Admiral Markets has relatively high minimum deposit requirements for some account types, such as those in GBP.
  • list bullet Some users have reported slow response times from customer support, during excessively busy periods.
Libertex Review

Libertex Review

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Pros

  • list bullet 0% fees on stock trades, minimum deposit of only $10 or equivalent
  • list bullet Over 322 tradable assets available
  • list bullet Unmatched user-friendly interface, easy for beginners to catch on

Cons

  • list bullet Unavailable in some countries, including the United States
  • list bullet Only features two types of accounts (Demo and Standard)

Admiral Markets

Admirals (formerly known as Admiral Markets) is one of the most popular online brokers in India, and it provides access to a wide range of financial instruments. It lets you buy and sell forex, stocks, indices, as well as various commodities. Because of that, it is one of our top choices for those who want to learn how to buy sovereign gold bond, digital gold, physical gold, gold ETFs, and alike. The broker is regulated by multiple financial regulators, including the UK’s FCA and Cyprus’ CySEC. 

Apart from that, Admiral Markets also stands out for its extremely low fees, as well as the fact that it offers access to numerous trading platforms, such as MetaTrader 4 and MetaTrader 5, which are commonly used among traders. It also offers trading with leverage, great risk management features, quick withdrawals with a minimum withdrawal being only $10, and more. Lastly, if you are new to the world of investing, the platform also has great educational resources, including guides, articles, and webinars.

Libertex

Our second choice for those who want to learn how to buy gold bonds and similar gold-related instruments is Libertex. Another well-known online broker that serves the Indian market, Libertex offers access to stocks, gold, silver, forex, and many more financial instruments. It is also regulated by CySEC, and it is generally praised for being very intuitive and user-friendly. 

The platform comes with multiple key advantages, one of the most notable of which is the zero-commission policy. This makes it a very attractive option for traders from India, as it lets them minimise their costs while investing. Apart from that, it is rich with trading tools and various features, and it even has a demo account where you can practice trading. You can access it from the mobile app or use its web version. As for withdrawals, most are processed within only 24 hours, with a minimum withdrawal being only $10. Lastly, this platform also offers various educational resources, which is perfect for those who wish to learn how to buy sovereign gold bond, gold ETFs, or simply buy gold online in its physical form.

Understanding Gold Investment Options

Before you learn how to buy gold online, you should first learn all the different options at your disposal. We hinted at this earlier in this guide, but if you want to buy gold online, physical gold is not your only option. There are several other options, such as:

Digital Gold

CoinBharat futuristic and elegant artwork of a gracious Indian woman investing in digital goldThe first we have digital gold, which is something of an umbrella term for a number of different types of gold investment options that are available. If you want to know how to buy digital gold, first note that this includes things such as gold stocks. 

Knowing how to buy digital gold is important because it is much more advantageous than physical gold. One of the biggest benefits of digital gold is the fact that it lets you benefit from the international market. Think of this — if you only know how to buy physical gold, you would have to pay extra for its storage, insurance, security, management, and alike. Physical gold comes in bars, or bullions, which are heavy, and easy to steal since they have a physical form.

On the other hand, if you learn how to buy digital gold, like gold stocks, you don’t have to worry about any of that. Plus, you can purchase gold stocks on any market around the world. With that said, you should still only buy gold online from licensed brokers. Do not accept random deals from unknown sources, be they individuals or unregistered trading companies, as there is a big risk of running into scammers.

Another reason why you should learn how to buy digital gold is the fact that it comes with assured purity. Physical gold can be impure, but digital gold purchased via registered brokerages guarantees 9.999% purity. Someone else is in charge of its storage and security, and they most likely keep it in protected, secure vaults. That way, you don’t have to worry about it, nor pay for extra storage fees. Digital gold is easy to buy online, and it is a good alternative to funds and ETFs.

Now, while we believe that you should know how to buy digital gold, you should also be aware that there are a few disadvantages to doing so. First of all, it doesn’t generate any passive income for you. It also doesn’t come under the regulations of the SEBI or SBI. Finally, there is a maximum amount of investment in gold, which is limited to Rs.

Gold Exchange-Traded Funds (ETFs)

Apart from learning how to buy digital gold, we can also recommend considering gold ETFs. An ETF, or Exchange-Traded Fund, is a fund that tracks the price of physical gold. They are made for investors who are after passive investment instruments and who wish to invest in physical gold prices without having to deal with actual physical gold.

As such, they are one of the best ways to buy gold online and not think about the troubles that come with gold bullion. You can get ETFs in paper or dematerialised form, where one Gold ETF unit equals 1 gram of gold. They are backed by physical gold, as well, so you don’t have to worry about them getting devalued. Simply put, gold ETFs represent a combination of stock investments’ flexibility and the simplicity that comes with learning how to buy digital gold.

With that said, there are risks that come with gold ETFs, as their price will drop if the price f physical gold drops. Essentially, whatever happens to physical gold in terms of value will reflect on the gold ETF, as well.

Sovereign Gold Bonds

CoinBharat artwork of two Indian traders at a gold marketThe last type of asset that we wish to discuss in our guide on how to buy gold online is gold bonds. Learning how to buy sovereign gold bond, to be precise.

As always, before you learn how to buy gold bonds, you should first understand what they include. Sovereign gold bonds is a simple but, according to many, superior alternative to buying gold. They are bonds that are denominated in grams of gold, and you can even get in multiplies of 1 gram. The minimum investment here is 1 gram, while the maximum amount that you can buy through gold bonds is 4 kilograms per investor per financial year.

They also come with a fixed interest rate of 2.50% per year. Sovereign gold bonds are RBI-mandated certificates, and they also let you invest in gold without worrying about storage or safekeeping. These products have emerged as a veritable way of buying gold with minimal risk and minimal hassles. And, of course, they are a great way to diversify your portfolio.

Step-by-Step Tutorial: How to Invest in Gold Through an Online Broker

Now that you have learned everything about gold and gold-related products, it is time to learn how to buy sovereign gold bond or simply how to buy digital gold online. To start off, the first step would be to pen an online trading account with a reputable brokerage firm in India. To show you how to buy sovereign gold bond, we have prepared a step-by-step guide using Admiral Markets.

Apart from being a reputable trading platform where you can buy gold online, it is also great for those who wish to diversify their portfolio by investing in stocks, silver, ETFs, and many other products and investment vehicles. 

Step 1: Visit the Admirals Website

The first step that you need to take, if you wish to trade gold online from India, is to visit the Admiral Markets website from this page, so as to be eligible for a special 100% welcome bonus after your first deposit. Admiral Markets and Libertex are ranked as some of the most trustworthy brokers, with special offers for Indian customers. Once there, tap on the “Start today for free” button or its “Sign up” counterpart from the upper-right corner of the screen, as shown below.  several requests for personal and contact information.

Admiral Markets homepage

Click here to access Admirals and sign up

Step 2: Sign Up and Fill Out Your Personal Information

The second step involves creating an account, which can be done instantly with your Google or Facebook, followed by the screen to fill out your personal information, including your first and last name, date of birth, an alike. Apart from that, the platform also requires your contact information.

Admiral Markets sign-up page

Step 3: Select the Type of Account That You Need

The third step in learning how to buy sovereign gold bond is to choose the type of account that you need. Admiral Markets offers several account types so that its customers can easily find the one that fits their needs. For example, there are demo accounts that are great for beginners, where they get to practice their trading. At the same time, there are live accounts for experienced traders, who are ready to start trading right away. Check what the platform has to offer, and select the type of account that suits your needs. Once you are done, click the “Open account” button.

choosing the right account type for you on Admiral Markets

Step 4: Identity Verification

In order to buy gold, you will next have to verify your identity. Admiral Markets is a regulated platform that is registered with Indian authorities. As part of that, it is obligated to verify the identity of every person who wishes to sign up and start trading. With that said, identity verification is a simple and quick process, where the platform requests that you upload certain identification documents, such as a PAN card or Aadhaar card. Once they verify that everything is in order, you will receive an email inviting you to proceed.

identity verification on Admiral Markets

Step 5: Deposit Your Funds

Nearing the end of this tutorial, we have the fifth step in learning how to buy sovereign gold bond, which is to deposit some money. You will have to fund your account with your initial investment. There are several supported deposit methods, including credit and debit cards, bank transfers, and even eWallets. Simply pick the method that suits you best, connect it to the platform, select the amount, and the money will arrive shortly, allowing you to proceed and finally buy gold. 

Once you have made your first deposit, the funds available in your account will double because of Admirals’ 100% welcome bonus.

depositing funds on Admiral Markets account

Step 6: Place Orders for Buying and Selling Gold

With that, we have reached the end of our tutorial on how to buy sovereign gold bond, or simply buy gold online. From here on, it is up to you to explore Admiral Markets, find the products that you wish to buy, and start placing buy and sell orders as you see fit. The platform offers multiple order types, including limit orders, market orders, stop-loss orders, and more. Or, if you still feel like practicing, you can use a demo account and buy gold later on.

Tips for Investing in Gold

Learning how to buy gold online is fairly simple, as we have discussed above. However, there are still things that you should know about it. Specifically, there are some useful tips that you should be aware of before proceeding.

Best Practices for Gold Investments

Whether you wish to learn how to buy gold bonds, physical gold, gold ETF, or digital gold — make sure to only stick to investing into what you understand. Essentially, if there are some aspects of the deal that are unclear to you as of yet, it is better for you to focus on other assets until you learn everything there is about this type of investment. The worst thing you could do is enter into a deal that you don’t understand, as that can easily lead to losses.

Another thing that you should focus on while learning how to buy gold online is what are your options. We have discussed many different types of gold investments above for this exact reason. A lot of people assume that buying gold simply means buying physical gold, which is the most troublesome way of investing in gold. That doesn’t mean that it is bad, and buying physical gold is definitely a preferred method to some, but out of all the methods described in this guide, it comes with the most strings attached.

Another tip that we have to share is considering gold mining stocks. This is closely connected to gold, but it doesn’t have a direct connection to it. You would essentially invest in the stock of companies that mine gold, rather than learning how to buy gold bonds or some other type of asset that is directly depending on the gold price.

Also, while it can be beneficial to know how to buy gold bonds, gold ETFs are generally the easiest and safest way to invest in gold. Other than that, we can recommend learning how to manage risks, where one of the best pieces of advice that we can give you is to diversify your portfolio.

CoinBharat artwork of a beautiful and mysterious Indian woman adorning gold and silver jewellery in an elegant manner

Risks Involved With Gold Investment

Learning how to buy gold online also includes the learning of the risks associated with investing in gold. There are not too many of them, but you should still be aware of them, as they can impact your decision when it comes to buying gold, or a specific gold-related investment vehicle.

The first thing to note here are security concerns when it comes to buying physical gold. This includes things like jewelry, or gold bars, which can be stolen if they don’t get stored and secured adequately. Gold is expensive and easy to melt and resell if necessary, which is why investors are advised not to purchase physical gold if they don’t have the means of securing it. It is much better to learn how to buy gold bonds and not have to worry about it anymore.

The same is true when it comes to the storage itself, not just security. You can’t just leave physical gold lying around in a drawer inside of your home. Storing physical gold, whether in the form of jewellery or gold bullion, can be quite a hassle. Usually, people turn to buying a safe, but even that is not secure enough, and you might end up having to store it with a bank or a company that offers secure storage. Once again, the alternative is to just learn how to buy gold bonds or ETFs or even digital gold and eliminate the risk entirely.

CoinBharat artwork of a gold market in a dark city landscape

The third issue with investing in gold revolves around making charges. As mentioned, gold is a popular asset, which makes it easy to sell. However, it does come with commission issues, as making charges could increase the cost of gold purchases, especially when it comes to jewelry. You could even end up having to pay fees for your sale. Gold ETFs are a way to go against such concerns, as you don’t have to deal with the problems surrounding gold bullion investments.

One more reason why you should learn how to buy gold bonds, ETFs, and similar assets apart from physical gold is purity concerns. As mentioned earlier, you can never be certain how pure is the physical gold that you are buying. However, you can always be sure that gold-related investment vehicles offer maximum purity. 

Lastly, physical gold investments do not generate passive income, unlike things like stocks or mutual funds. This could be a concern if you wish to invest into assets that will continue to give back to you in exchange for holding on to the asset, and maybe retiring early. The only way to profit from physical gold is by selling it at a more favorable price than it had when you bought it.

Conclusion

CoinBharat artwork of a beautiful Indian mystic beauty adorning gold and silver jewelleryThroughout this guide, we have seen different ways of investing in gold, and we explained how to buy gold online, and why you should learn how to buy gold bonds or ETFs, as opposed to physical gold. Learning how to buy gold online comes with a number of advantages, and minimal risks, while physical gold comes with extra costs and concerns. Apart from physical gold, you can buy sovereign gold bonds, digital gold, or gold ETFs, all of which are believed to be superior alternatives.

We also talked about choosing the right online broker, and recommending a few that are among the best in India. Essentially, you should ensure that the broker has the asset that you seek to invest in, that it is regulated, and reputable, that it supports the payment method that you prefer to use, and that it doesn’t charge massive fees. 

In the end, investing in gold in India is a great way to protect your funds from inflation and similar problems of traditional finance, as gold is incredibly resistant and long-lasting. However, you still have to consider your options and make sure that you have picked the most convenient one.

FAQs

What is the minimum amount of investment required to start investing in gold through an online broker?

The minimum amount needed to buy gold online depends on the broker. Even then, it depends on what you are buying. You can buy gold for ₹6,000, or you can buy sovereign gold bonds for ₹5,000, both of which are approximate prices per gram.

Can I invest in gold through an online broker using a mobile app?

Yes, pretty much all reputable brokers offer apps for Android and iOS devices in addition to their web versions.

Is it safe to invest in gold through online brokers?

As long as you are using a reputable and regulated online broker, you can safely buy gold online with any broker that fits these requirements.

How long does it take for my investment to reflect in my account after making a deposit?

For the most part, it depends on the deposit method that you use. Deposits made via debit and credit cards will typically be visible within one business day. EWallets are the most efficient, as the payments typically arrive immediately, while bank transfers tend to be the slowest.

What are the tax implications of investing in gold through online brokers?

Any income made from gold investments is taxable, and while it depends on what kind of gold investment you made, for the most part, Short Term Capital Gain and Long Term Capital Gain are both taxable, with the Long Term Capital Gain typically sitting at 20%.

Are there any trading limits when investing in gold through an online broker?

While this is also a matter that might depend on the broker, typically, there is no limit on how much gold you can buy, as long as you are aware that any profits made from gold investments are subject to taxation.

Can I trade gold through an online broker 24/7?

With Gold Futures, you can trade almost 24 hours per day, but other than that, you will have to wait for the market to open on trading days.

What happens to my gold investment in case of a market crash?

During a stock market crash, commodities like gold tend to see an increase in price. Gold has a flexible price that goes up and down depending on supply and demand, but typically, in case of a stock market crash, investors move to buy gold for safety and profits.

How do I sell my gold investments through an online broker?

Once you buy gold, you will hold it until you are satisfied with its price movement. Then, it is time to sell. The process is similar as the one you went through while buying, only this time, you will submit a sell order and enter the amount that you wish to sell.

Is there any difference in the investment process for physical gold and gold ETFs or mutual funds through online brokers?

As far as investment process goes, there is little to no difference in buying physical gold vs gold ETFs and other products. However, when it comes to physical gold, you also need to pay for storage, security, markups, and more, while gold ETFs and other gold-related products do not include such issues.