8 Things To Know Before Investing In Digital Gold

8 Things To Know Before Investing In Digital Gold

by June 18, 2021

Are you looking to diversify your portfolio by investing in precious metals? If your answer is yes, then you’ve come to the right place. Investing in precious metals is one of the best ways to increase the safety of your holdings. It breaks up the risks associated with other kinds of investments like bonds and stocks. While these other investments can be affected by the economic crisis, precious metal investments are always stable.

There are several precious metals you can invest in, but the most common one is investing in gold. Gold is the king when it comes to the precious metal world. It’s the most secure way to store the value of your wealth. Unlike other assets that are affected by economic forces, the gold market isn’t affected. That’s why investing in precious metals is an important thing to Learn About Gold investment, it will help you take advantage of this and remain firm during the economic crisis.

This article has all that you need to know about digital gold investment, including what digital gold is, things to know about digital gold investment, and much more. Continue reading to learn more.

What Is Digital Gold?

As earlier noted, investing in gold is the way to go for anyone who wants to diversify their investment portfolio. It’s highly demanded in all the seasons of the year. In the past, gold was purchased in the form of coins and biscuits. However, buying coins and biscuits came with a lot of risks. They came with additional charges such as storage costs and could easily be stolen. That’s why there was a need to digitalize gold investments. Today, you can purchase gold digitally, which helps eliminate storage charges and the risk of being stolen.

That said, digital gold is a way of purchasing or trading physical gold that can be held in digital forms through online platforms. The purchased gold will be stored on behalf of the investor by an authorized vendor. Investors buy digital gold mainly for investment purposes. It’s the easiest way to invest in gold because you can buy and sell it online from where you’re. It’s also the most traded metal worldwide. You can easily get it in almost all parts of the world, and it can be a source of your wealth if you invest wisely.

Digital Gold

Photo by Executium on Unsplash

Here are the simple yet essential things you need to know before investing in digital gold.

1. Where To Purchase?

The easiest way to purchase digital gold is by working with an intermediary who acts as a middleman between the seller and the buyer. These middlemen can either be a brokerage firm, a bank, or a fintech company.

Intermediaries will help find authorized and reputable vendors. But before you decide to work with any vendor, be sure to check them for features like their refund and the gold purity level. Research to ensure that the dealer you opt to work with offers buys and store services. This will help avoid the physical possession of gold.

You can learn more about your dealer by reading other customers’ reviews on their websites. Many positive reviews and feedback will indicate that the dealer is genuine and might be the best firm to trust your investment with.

2. Are There Making and Delivery Charges?

One advantage of trading in digital gold is that it eliminates the making charges. This means that the buyer will only incur the purchase cost. However, when the buyer decides to sell their gold at the end of the investment period, they’ll incur the making and the delivery charges as they could incur with physical gold.

3. Are Digital Gold Investments Taxed?

When you purchase digital gold, you’ll be charged with a 3% tax service. Consequently, any profit you make with your digital gold investment will attract tax charges just like any other investments.

4. How To Invest in Digital Gold?

Digital gold investment is a simple process and takes no time. First, you need to visit one of the gold investment platforms and log in. After you’ve logged in, go to the gold locker section and enter the amount you want to invest in digital gold. Then, you’ll need to choose your preferred mode of payment to complete the process.

After you’ve paid, you’ll receive a confirmation notification indicating that your transaction has been completed. The price of your gold will be the market price at the time of the transaction.

5. Are There Digital Gold Investment Scams?

When it comes to buying digital gold, you need to have adequate knowledge and skills about the industry. Just like any other type of investment, there are many digital gold investment scammers out there who can make you lose all your money. To avoid being scammed, you need to take your time to learn the basic features of gold. One of the major features you need to know in gold is its purity.

6. When To Buy Digital Gold?

Trading in gold is like any other business where you buy and sell to make profits. Making profits out of your investment can only be possible if you know how to time. Timing is an important business skill you must strive to possess if you want to do well in your investment.

The idea here is to buy low and sell high. This will require you to study the market and how prices are constantly moving. To reap good returns, be sure to buy your gold when prices are low and sell when they’re high.

7. Should You Invest in Allocated or Unlocated Gold?

Each of the two options has its implications. Allocated gold, for instance, provides the highest degree of safety. In addition, allocated gold is segregated and gives the investor ownership title. Finally, allocated gold can’t be leased to third parties. On the other hand, unallocated gold contains many risks because they aren’t securely stored in the investor’s title.

8. How Liquid Is Your Investment?

While most people invest in long-term investments, the future is always uncertain. Some circumstances might require short-term liquidation. Selling physical gold can sometimes be an overwhelming process.
On the other hand, digital gold trades on an exchange and can be traded throughout the day. So, digital gold is highly liquid and allows you to get money as soon as you need it.

What Are The Benefits Of Investing In Digital Gold?

There are many benefits of investing in digital gold. Some of these benefits are explained below.

  • Allow for Minimum Investment

Investing in digital gold is simple and easy, and anyone can go this route. Unlike investing in physical gold, investing in digital gold requires minimal investment.

While the minimum amount you can invest in digital gold varies from platform to platform, you can generally invest small amounts of money. This means that anyone can invest in digital gold according to their budget.

  • It Is a Safe and a Secure Investment

Digital gold is stored in online platforms and secured in vaults. Online platforms help save on storage space. This also reduces the chances of your gold being stolen. Storing your gold in physical form is prone to several risks because it can easily get stolen.

  • Allow For Physical Delivery

Even if you’re trading your digital gold through online platforms, you can redeem it at any time and have it delivered to your doorstep in physical form. Once your digital gold investment period is over, your dealer can physically and securely deliver it to you. This eliminates the hassle of going back to the market to buy physical gold for yourself.

  • Quality and Purity of The Gold

Most digital gold dealers operate under the quality assurance regulatory bodies. This ensures that these dealers don’t compromise the quality of the gold. Most of them guarantee almost 100% purity, giving investors a lot of confidence when investing in digital gold.

However, the purity and quality of digital gold depend on the platform you’re dealing with. So, it would be beneficial to do your research to find more details about the dealer you choose and the quality of gold they offer.
Gold comes in different quality and purity levels, which affects the price. 24k gold is the purest form of gold, and it’s sold at a high price. Also, before the gold is sold, it’s mixed with alloy for ornamental purposes. The price of gold is also determined by the type of alloy used.


Investing in digital gold is one of the best ways to expand your investment portfolio. But before you jump into investing all your money into this avenue, you need to take your time and research to learn how this investment works.
There are many things you must be aware of before you invest in digital gold. First, you must know where to purchase your gold. While it might not be possible to work independently, you must find a reputable broker to help you invest wisely.

If you’re looking to safeguard your investment against inflation and economic calamities, digital gold might offer you a secure investment option. There are also many benefits of digital gold investment, as explained above, that’ll help you make a wise decision in your investment. Also, you need to understand is when and how to invest in digital gold.


Featured image: Photo by Jingming Pan on Unsplash 

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