Gold As An Investment Not Ornament

Outlook Money hosted a Diwali webinar on investing in gold ETFs during the festival season, moderated by Ankita Verma, Assistant Editor, with Chintan Haria, Principal Investment Strategy at ICICI Prudential AMC, and Vivek Goel, Founder and Joint MD at Tailwind.

Haria opened with a clear frame for festive buyers: “If you buy gold for wealth and not for wear, an ETF is the cleaner route.” He explained that ETF units are “backed by high-purity gold in secure vaults,” removing purity doubts and locker hassles, and allowing small ticket purchases through a regular broker account. On tax treatment, he added, “For investors who can hold with discipline, the long-term classification for ETFs after twelve months is a real advantage. Always check the current rules before you act.”

Goel broke down the money math that most shoppers skip. “Physical gold starts with 3 percent GST and making charges that can stretch to 5 to 15 percent. Then there is locker rent and possible melting losses when you sell,” he said. “With ETFs, your costs show up as an expense ratio, brokerage and a small spread. The total is usually lower and far more transparent.” He also flagged market mechanics: “ETFs trade on an exchange, so look at the scheme’s NAV before you place an order. Premiums and discounts do happen on busy days.”

On role and allocation, the panel was blunt. “Gold is portfolio insurance, not a lottery ticket,” Haria said. “Use it to cushion inflation, rupee weakness and global shocks. Set a steady allocation and review it alongside equity and debt.” For investors without a demat account, he noted that “gold funds that invest in ETFs can work, but the holding period rules are different.”

The caution on convenience was equally pointed. “Digital gold on apps is easy to buy, but regulation is still a grey area and costs are often embedded,” Goel said. “ETFs sit inside a clear SEBI framework with daily disclosure.”

This is a crisp look at the why, the how and the pitfalls. To hear the full cost examples, tax nuances, and the panel’s step-by-step buying checklist, watch the complete Outlook Money webinar. It will help you make a festive decision that stands up in March, not just on Dhanteras.

Disclaimer: The information set out above is included for general information purposes only and is not exhaustive and does not constitute investment or tax advice. Mutual Fund investments are subject to market risks, read all scheme-related documents carefully. Investors are requested to review the prospectus carefully and obtain expert professional advice with regard to specific legal, tax and financial implications of the investment/participation in the scheme