Buying gold online digitally has been growing in popularity over the past few years. With rising gold prices and increased interest in purchasing precious metals online, many buyers want to purchase gold digitally as an innovative way to add gold to their portfolios.
Buying gold digitally appeals to people for several key reasons:
- It offers the flexibility and ease of purchasing gold through a website or mobile app instead of physically buying gold bars or coins. This improves accessibility.
- It allows buyers to purchase gold in smaller denominations, making it more affordable.
- It eliminates the hassles and costs of physically storing gold while allowing buyers to benefit from gold price movements.
- The online provider stores the gold securely on behalf of the buyer.
With economic uncertainty and rising inflation, purchasing gold digitally has emerged as a transparent, secure and convenient way for buyers to diversify their assets.
What is the Process of Buying Gold Digitally? How is it Different from Buying it Traditionally?
Online gold platforms allow you to buy certified gold stored in secure vaults through a simple online process. Payment, invoices, and vault receipts are generated digitally. This contrasts with visiting local stores to personally select, purchase and receive delivery of physical gold items. The online process focuses solely on purchasing gold rather than for jewellery or decorative purposes.
Although traditional gold allows you to possess a tangible asset, buying gold online gives you ownership of the same precious metal stored safely in certified vaults by the provider. The process is entirely digitised for convenience.
Some critical differences compared to traditional physical gold buying:
- Buying gold digitally can be done 24x7 from anywhere at live market prices. Buying physical gold has limitations in terms of store timings, inventory, etc.
- Buying gold online offers higher liquidity since it can be sold to the provider anytime. Selling physical gold can be more complicated.
- Gold, which is available online for selling, starts at lower prices than higher denominations for physical gold coin/bar purchases.
- Storage costs are eliminated with gold digitally. Physical gold attracts storage charges and risks.
The provider secures the gold on behalf of online buyers, handling storage while buyers get full ownership and price exposure.
The Blockchain Tech Behind Buying Gold Digitally
- Each gold transaction made digitally, from procurement by the provider to final sale to various customers, is recorded through blockchain.
- A blockchain is a distributed ledger system that allows transparent transaction recording and asset tracking across a network of computers without any centralised control. This makes tampering practically impossible.
- All gold transactions made digitally are immutable and can be viewed by customers as needed to verify their holdings. Automated audit reports also enhance transparency.
This underlying blockchain architecture establishes buying gold digitally as a credible equivalent to purchasing physical gold. The technology eliminates the need for third-party trust and verification, enhancing security and process efficiency.
Buying, Storing and Selling Gold Digitally – How it Works
The process of buying gold digitally has been designed for simplicity:
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Find a Reliable Provider: Conduct thorough research to select an established online gold provider with a track record of client security and support. Check their gold sourcing, vaulting, insurance, etc.
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Create an Online Account: Create an online account with your verified KYC documents. Choose preferred payment options.
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Buy Gold Digitally: Use the website/app dashboard to buy gold digitally in denominations as low as 1g whenever you want at live market rates, including minting/making charges.
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Gold is Vaulted: The provider procures the equivalent physical gold you purchased and stores it in secure facilities like Brink’s vaults.
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Portfolio Tracking: Your gold wallet reflects all online transactions, and you can track daily value based on gold price changes.
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Redemption: You can redeem holdings for physical coins/bars or equivalent rupees at any time or set monthly redemption plans. Partial or full redemption is allowed.
Advantages and Disadvantages of Buying Gold Digitally
| Aspect | Advantages | Disadvantages |
|---|---|---|
| Potential for High Returns | Buying gold digitally can appreciate significantly, offering high returns | High returns come with high risk due to market volatility |
| Security and Storage Concerns | No physical storage is needed, reducing the risk of theft or loss | Dependent on the security of online platforms and technology |
| Volatility | This can lead to quick gains if the market moves favourably | Market volatility can result in significant losses |
| Liquidity | Easy to buy and sell online, providing good liquidity | Market conditions can affect the ability to quickly sell at a desired price |
| Accessibility | It can be purchased in small amounts, making it accessible to more people | Requires internet access and online literacy |
| Transparency | Transactions are recorded digitally, ensuring transparency | Relies on the integrity and transparency of the online platform used |
| Costs | Lower transaction costs compared to physical gold. | This may include hidden fees and charges by online platforms |
| Convenience | Can be bought and sold from anywhere at any time | Requires a stable internet connection and a secure payment wallet |
Purchasing gold digitally presents several advantages, including the potential to benefit from gold price appreciation, convenience, and accessibility. However, it also comes with notable disadvantages, such as exposure to market volatility, dependence on platform security, and the need for online literacy. Buyers should carefully weigh these factors to make informed decisions about purchasing gold digitally.