Gold ETF: A gold ETF (exchange-traded fund) is a financial product that tracks the price of gold and allows investors to invest in gold without physically owning it. It is traded on stock exchanges just like shares, providing a convenient and cost-effective way to invest in gold. Each unit of a gold ETF usually represents a certain amount of physical gold, which is safely stored by the fund. Investors benefit from price transparency, high liquidity, and lower costs than buying, storing, and insuring physical gold, making it an efficient option for diversifying a portfolio or hedging against inflation.
Global demand for Gold ETF (Equity Traded Fund) has reduced, yet investor interest in Gold ETF in India remains stable. In November this year, a record amount has been invested in Gold ETF for the eighth consecutive month. Based on the data of the depository, an amount of $ 175 million has been allocated to Gold ETF this month.
Gold ETF is considered a safe investment option
Experts suggest that like gold, Gold ETF is also considered a safe investment option. In such a situation, due to the turmoil in the local stock market since October, investors have given more preference to Gold ETF. After October, investors have adopted Gold ETF in November as well. Market expert Mayank Mohan says that amid the turmoil in the stock market, the changes made by the Central Government in the rules regarding Gold ETF have made Gold ETF more attractive to investors than before.
Government changed the tax rules related to Gold ETFs
This year, the central government has changed the tax rules related to Gold ETFs in the Union Budget. Under the new rules, a capital gain tax of 12.5 percent will be levied on the sale of Gold ETFs after one year. Earlier, capital gain tax was levied on the basis of the tax bracket of the investor. Due to the change in this rule, Gold ETFs have become more attractive to investors than before.
Similarly, bullion market expert Santosh Taneja says that the closure of Sovereign Gold Bonds has increased people’s interest in Gold ETFs across the country. Investors get the benefit of GST by investing in Gold ETFs instead of physical gold. The most important thing is that this investment is completely clean and safe. As a result, there is a trend towards Gold ETFs among Indian investors.