Digital Gold: What it is, where you can buy it, and its advantages and disadvantages


When you invest in digital or physical Gold, the companies buy an equal amount of Gold and keep it under your name in secure vaults.

Although Gold is no longer used for currency, it can still be used to make money. Gold has been a storehouse of value for more than 3000 years. It has been around for longer than any other currency. 

Many investors find it a great solution to be able to purchase Gold online, as people are less inclined to visit gold dealers and jewelry shops. Augmont Gold Ltd., a digital gold trader, saw its business grow by 40-50% during the lockdown.

Before we get into the details of Digital Gold, let’s take a look at how we have invested in Gold over time:

How to Invest in Gold

The best way to invest in Gold historically was to buy physical Gold in the form:

  1. Coins
  2. Bullion and
  3. Jewelry

We also offer Sovereign Gold Bonds as well as Gold Mutual Funds and Gold ETFs.

Digital Gold is a popular way to invest in Gold during a pandemic.

What is Digital Gold?

There are many downsides to buying physical Gold. It is difficult to identify the purity and legitimacy of Gold, and it can be hard to store and safe-keep it. Another problem is that we are currently in the middle of a pandemic. It’s not ideal for visiting gold dealers or jewelry shops.

Digital Gold can be purchased online and stored in vaults insured by the seller for the customer. This helps to overcome the issues associated with physical gold purchases. You only need internet/mobile banking to investing digitally in Gold anytime, anywhere.

How digital gold works?

Digital Gold can be purchased from various mobile e-wallets, including PhonePe, Google Pay, and Paytm. Motilal Oswal and HDFC Securities offer digital gold investment options.

Is it as simple and straightforward as it sounds? Let’s look at the ways you can invest in digital Gold.

How do you trade digital Gold?

You first visit any platform that offers digital gold investments.

Once you have logged in, follow these steps:

1. Enter a value in grams or $ – You can buy Gold at a fixed price or by weight at today’s market rate.

2. You can choose your payment method – After you have completed the KYC process, you will be presented with multiple payment options such as an account or card, or wallet.

3. You can store your Gold in a secure locker. Your account is instantly updated and accessible 24/7.

4. Sell whenever you like – You can sell your Gold digitally to the platform whenever it suits you.

5. You can take physical delivery of the Gold. If you do not wish to sell the Gold, you can request delivery at your doorstep in bullion or coins. Notice: Delivery fees apply.

Digital Gold Investments:

  • You can have physical delivery of the Gold delivered to your home.
  • As low as Re.1 can be invested
  • Digital Gold can be used to secure online loans.
  • Digital Gold is authentic, and the purity of digital Gold is 24K 99.5% in SafeGold, and 999.9 for MMTC PAMP orders.
  • Your purchase is safe, and 100% insured.
  • Digital Gold can be exchanged for physical jewelry, gold coins, and bullion.

Digital Gold Investments:

  • Maximum investment limit of Rs.2 Lakhs on most platforms
  • Absence of an official government-run regulator such as RBI or SEBI.
  • Additional delivery and making fees are added to the gold price.
  • Some companies offer limited storage periods, which can be used to deliver the Gold or sell it.

In times of crisis, Gold acts as a safety net.

To support the previous statement, let’s take as an example the Covid19 crisis. National lockdowns meant that consumers and businesses were forced to work without pay, and there was a higher debt load. The Reserve Bank and the government had to increase spending while decreasing the growing amount of debt to keep the economy afloat. 

This meant that there was more money supply, which put more cash in peoples hands. Oversupply decreases the currency’s purchasing power, and inflation fears grow.

However, Gold as an asset class protects against the falling currency. In turn, demand for Gold rises, and with it comes an increase in Gold prices. Inflation and increased debt burdens lead to an ever-increasing need for stimulus packages. This creates a vicious circle of weakening currency purchasing power. Gold shines in uncertain times!



Gold should be an investment class. There are other options than investing in digital Gold, such as Sovereign Gold Bonds or Gold ETFs.

Gold should be part of a long-term portfolio. It is, therefore, better to invest in gold bonds, which pay 2.5% more interest. However, bonds are more liquid and can be used for short-term hedges. Gold ETFs are a better choice as they fall under the supervision of SEBI.

Digital Gold will be an attractive investment option for those who prefer to invest in physical Gold once the Rs.2 Lakhs investment limit is met and a regulatory body has been appointed.

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