Are You Aware About E-Gold???

 

Many of the common people are not aware about what is really E-gold or many of you might not have heard about the word 'E-Gold'. Actually E-Gold was offered by 'National Spot Exchange Limited(NSEL)' which is completely different from normal Physical Gold. E-Gold helps or enables you to buy gold in electronic form and hold it within that person's account. Like E-gold another E-series are E-Silver and E-Copper. Trading in E-Gold has been on since 17th March 2010. E-Gold units can be bought and sold through the exchange (NSEL) only just like shares.You can buy gold in physical form from your ‘friendly’ jeweller or any neighbourhood jeweller but it is really risky to store it.

You can buy gold in physical form from your ‘friendly’ jeweller but it is risky to store it. You can buy gold exchange-traded funds (ETFs) as an investment but cannot convert it into physical gold. The National Spot Exchange Ltd (NSEL) has an answer to this problems as E-Gold can be converted it into physical gold, which is known as re-materialization and there are charges for this re-materialization. The minimum quantity for converting into physical gold is fixed as 8 grams. Rematerialization facility is currently available in 15 major cities.

When you rematerialize you will have to pay some rematerialization charges (which will be in the range of Rs.150 for 8 grams), but the VAT might be a bigger amount based on how much quantity you hold. The storage charges of holding gold in demat form is Rs.0.60 per unit/month. By buying gold in electronic form, the individual need not worry about the purity of gold, storage costs and the insurance of gold. If the individual has bought e-gold only for investment purpose and does not need to take delivery of physical gold, then he can always sell the e-gold units and encash them. To buy E-Gold units, the individual needs to open a demat account (beneficiary account) with one of the impaneled Depository Participants (DP). The list of the impaneled DP’s is given on the NSEL website.

If an individual wants to take physical delivery of his e-gold units then he / she can take it in multiples of 8 grams, 10 grams, 100 grams and 1 kg. To start with the exchange has delivery centres at Ahmedabad, Delhi and Mumbai. In due course of time the exchange plans to open more delivery centres in other cities. India for long has been the largest consumer of gold in the world as Indians love to buy gold. But since last few years because of the steep increase in the price of the yellow metal, it is getting further out of reach of the common man. By introducing the E-Series range of products, NSEL is focusing on the affordability factor by keeping one unit equivalent to 1 gram of gold which makes gold affordable once more, for the masses.

The introduction of e-gold is really a good thing but still it holds risky as:

• The biggest risk associated is that of the price movements in the leading market. In case you have a ‘BUY’ position and then the price starts to go down, or vice versa, you will be in a loss. Don’t just go by the traditional price hikes. Market works indiscriminately and what has been going up till now can start falling down anytime and at any moment. So from a trader’s point of view, it is required to keep a close eye on your investment.
• Another risk regarding e-purchase of these assets is that the buyer is not the outright holder of the gold, as the institution holds the metal on his behalf.
• With ‘E-Gold’, cyber security is also a matter of concern, as there is always a risk of account being hacked.

In short, E-Gold is especially good for individuals of long investors not small investors. But many of the people are not aware about this E-Gold, so to make them aware advertisement should be done.
For any further enquiry or information go visit NSEL website.