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Is Digital Gold winning its battle against Physical Gold?

2 Mins read

A lot of people often ask, What is Digital Gold?

A very simple yet a debatable answer to this is, “Digital Gold is Physical gold but in Digital Form.” Now, for a lot of people this can be a bit confusing to understand, but don’t worry, let me explain.

Understanding the Definitions

In the investment world, Physical Gold Investment is done primarily with the help of Gold Coins and Bars, investors buy them in small quantities. This procedure of buying gold(bullion) is called as “Stacking”. The bars/coins bought are stored/held till the time it generates wealth for the investor. (“Stacking!”, no matter how cool it may sound it comes with a huge price. We will cover the concept of Stacking in further articles.)

At the same time, Digital Gold is a Digital Representation of Gold(Physical). So, when you invest in Digital Gold you are actually investing in physical gold it’s just that you don’t get the metal physically(unless you opt to). You only get the digital representation of the physical gold.

So you might wonder that if you have the digital representation of Gold then where does the physical gold goes? Well, The digital gold provider stores the Gold for you. For Example, lets say you Buy Digital Gold from GoldLane, then, in this case, GoldLane will store the Gold for you. The Physical Gold will be stored safely in the safes/vaults, while you enjoy the digital representation. Just like how shares are stored in Demat accounts, Digital Gold is stored in the Digital Vault.

“What about selling Digital Gold?”

Now, In the case of Digital Gold you can at anytime;

(I) Exchange the digital gold and take the delivery of the metal at your doorstep or,

(II)Sell it for cash, the amount of which, will be credited to your bank account.

So, which one is better, Digital Gold or Physical Gold?

Both of them have their positive and negative points, to understand the key differences between them let us take a look at this table.

BasisDigital GoldPhysical Gold
MeaningIs a digital representation of the physical metal.Is available in the form of Gold Bar and Coins, and provides the most(highest) exposure to Gold.
Minimum Amount₹ 1On the basis of weight, smallest coins/bars weigh around 1gms, which usually cost around ₹5000 depending upon the prevailing market prices
StorageThe Digital Gold provider store the Gold for youThe investor has to store the gold as per their convenience
Selling optionsTwo Options; sell it for cash, or take delivery of the physical goldOne Option; Sell it for cash
OwnershipIndirect with an option to convertDirect
TimeLess time consuming, investors can buy/sell the digital gold from the mobile applicationsTime consuming, the investor has to visit the store to buy/sell the metal
FlexibilityHigher in comparison with Physical gold.Lower in comparison with it’s digital representation.
Difference table

After understanding the differences between them, it is quite clear that DigitalGold clearly has the edge, because of its distinguishing features.


No doubt Digital Gold provides investors with amazing options to have an exposure towards gold but this does not mean that Physical Gold is not a good option. A very important fact is that without physical bullion, digital gold cannot exist! So, if you ask which one wins the battle, then the answer is both.

Digital gold derives its value from physical gold rates, therefore, both it’s(digital gold’s) price and value are dependent on physical gold. At the end everything comes down to the viewpoint of the investor, if the investor wants greater flexibility with their investments, then Digital Gold is a better option anyday, while at the same time if the investor wants greater exposure to Gold, then, in that case, a Gold Bar would be a better option.

Authored by- Shivank Goswami

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