Physical Gold vs Gold Mutual Funds: Which is more efficient?

financialexpress.com:

Indian households often hold gold as an asset class, passing it down from one generation to another as a symbol of wealth and heritage in India. There are many stories relating to gold and people love this metal as a jewellery more than just an asset.

When it comes to investing in gold, it has long been a popular choice for investors looking to diversify their portfolios and hedge against uncertainties. Where gold holds cultural and financial significance, individuals often consider investing in physical gold or gold mutual funds. Both options have their pros and cons, and understanding the differences between the two can help investors make informed decisions based on their financial goals and risk tolerance.

Investing in physical gold involves purchasing gold in the form of jewellery, coins, or bars. Here are some key points to consider:

Also Read: Mutual funds to fixed deposits, where to invest for 5-year financial goals?

* Tangible Asset and Liquidity

One of the main attractions of physical gold is its tangibility. Investors have direct ownership of the metal, which they can hold, store, and use as desired. Also, gold jewellery and coins can be easily sold or pledged for loans in India. However, the liquidity may vary based on factors such as purity, design, and prevailing market conditions.

* Storage Safety and Purity

Storing physical gold requires safekeeping measures to prevent theft or damage. Many investors opt for bank lockers or secure home safes, incurring additional costs. Ensuring the purity of physical gold is crucial, especially when buying jewellery or coins. Investors must purchase from reputable sources to avoid counterfeit or low-quality products.

* Price Transparency

The price of physical gold