Authored by Shivank Goswami
While investing in digital gold is a relatively simple process, new investors may encounter some obstacles early on in their digital gold investment journey. This article aims to address this issue by explaining all the fundamental concepts related to digital gold investments.
Dictionary
Averaging
Averaging is the process of buying Digital Gold/Silver in a staggered manner, irrespective of the rise or fall in prices. This is usually done while deploying a SIP, i.e., Systematic Investment Plan. The main objective of averaging is to purchase Digital Gold/Silver in small amounts consistently over a period of time. As a result, the investor’s portfolio grows, and they can benefit from any rise in prices. Furthermore, since the purchases are made at different levels, a slight fall in Gold prices does not impact the portfolio. Instead, any small fall or rise presents a new opportunity to purchase Digital Gold/Silver.
Automatic Reminder / Alerts
GoldLane App offers an automatic reminder feature to its users for free. With this feature, users can create unlimited custom price alerts to stay connected to the market without having to frequently track it. For instance, an investor who wants to buy gold only when it reaches ₹5000 per gram can set an alert. The app will track the market for them and notify them as soon as the price hits ₹5000, eliminating the need for the investor to regularly check the rates.
Watch out youtube video to learn how to create a price alert.
Bullion
Bullion is a term used for physical Gold and Silver. Bullion is the precious metal in its raw form, before its conversion into any jewellery or industry goods. Trading of Gold and Silver in physical form is called as Bullion Trading. Digital Gold also involves Bullion trading, but instead of you going out and buying the physical gold, we buy it for you and we store it in out vaults, while you enjoy the digital representation and the option to convert it into physical gold anytime you want.
Bar
A gold bar is a rectangular-shaped piece of pure gold that is produced by a mint or refinery. It is typically cast in large sizes ranging from 1 gram to 1 kilogram or even more. At GoldLane you can convert your Digital Gold into Beautiful Gold Coins and get them delivered to your doorstep.
Coin
Gold coin refers to a physical piece of gold in the form of a coin that is purchased primarily for investment purposes rather than for collection or numismatic value. At GoldLane you can convert your Digital Gold into Beautiful Gold Coins and get them delivered to your doorstep.
Conversion (Gold)
The process of converting Digital Gold into Physical Gold.
Digital Gold
Digital Gold, is a new form of investment in the Gold markets. Instead of buying Gold in the form of jewellery, coins and bars, with the help of Digital Gold you can buy it’s digitalized version. The benefit of Digital Gold is that instead of you storing the gold physically at your home and carrying the risk of theft. We store it for you in our insured vaults which are audited independently. Also, with the help of Digital Gold, you can start buying Gold for as low as Re 1. This makes it accessible to everyone.
Delivery
Delivery is the process of shipping the Gold to the user’s doorsteps with almost security. At GoldLane we offer the ability to convert digital gold into physical gold coins and bars which can be delivered to your doorsteps with the help of Brinks.
Exchange
With the help of GoldLane’s Exchange function, you can exchange the Gold that you have in your Digital Vault for beautiful jewellery at our partnered jewellery stores for low making charges.
Expiration (Time Based)
Gold Rates frequently change in the live market, at GoldLane we have adopted a very safe and transparent system to protect our investors from wild moves. We follow a 5 minute expiration model. With this investors can get an extra benefit. For example, Gold is trading at let’s assume ₹112 per gram (Too unrealistic Haha) at 12:00 PM and suddenly price pumps up to ₹120 per gram at 12:01. Even though the market prices have increased you will be able to buy the Gold at discount at ₹112. The prices will become ₹120 at 12:05.
Gift
With the help of the Gifting Function at GoldLane, you can gift your contacts Digital Gold and Silver. Gifting Gold is always a precious and thoughtful Gift. You can also use your Vault Balance to Gift. The receiver of the Gold can do anything they want to do with the Gold. They can hold it as an investment, tr convert it into beautiful Gold Coins and Bars or convert them into beautiful Gold Jewellery.
GST
Digital Gold is subject to GST. Read out blog here which talks about GST in reference to Digital Gold.
Hedging
Hedging is the aspect of trading and investments which involves reducing your financial exposure and risks. Gold and Silver for long have been used as a hedge against inflation. These precious metals tend to perform really well at the times of inflation. So the next time the Fed is on a rate hike spree you know what to do!
Investment Strategy
Investment strategy refers to a set of principles or guidelines that an investor follows to make investment decisions. It involves a systematic approach to investing that takes into consideration factors such as the investor’s financial goals, risk tolerance, time horizon, and market conditions. In respect to Gold, investors usually go for two strategies;
(i) Lump-Sum Investment
(ii) Investment via SIPs
KYC
KYC is Know Your Client, which helps business verify the existence of users. At GoldLane the KYC procedure is very seamless. Being KYC verified unlocks a whole new world of features for you at GoldLane. Read our KYC norms here.
Liquidity
Is defined as how quickly can an asset be converted into cash. Gold and Silver are highly liquid assets. The same goes for Digital Gold and Silver as well. At GoldLane, we offer tight spreads, therefore you can spuare-off your holdings anytime without worrying about slippage.
Ounce
Is a way Gold and Silver assets are measured. The ounce system is not popular in the Indian Markets. We follow the Kilograms and Grams concepts. However, it is important to not that internationally all the major trading on popular gold exchanges happen in Ounces and not kgs or gms.
Purity
Purity in gold refers to the percentage of gold content present in a piece of gold jewelry, coin, or bar. It is measured in karats, where 24 karat gold is considered to be 100% pure gold. For example, 18 karat gold has 75% gold content and 25% other metals, while 14 karat gold has 58.3% gold content and 41.7% other metals. The purity of gold is an important factor in determining its value and is verified by hallmarking or certification from a reputable agency.
At GoldLane we offer 999 highest purity Gold.
Smart Switch
Is a special feature of GoldLane in which, users can convert their Gold holdings into Silver and vice versa at anytime enjoying the benefits of price movements on both ends. At times Silver outperforms Gold. Silver is usually a more volatile assets. With the help of our feature, we can easily switch between Gold and Silver and make higher profits from our investors.
Systematic Investment Plan
At GoldLane we provide Smart SIPs to our users. Users can create amazing SIPs on the basis of weight and amount. The Smart SIPs work on an automatic system meaning that you wouldn’t have to buy manually everytime, the SIP will do it for you. You just have to enter the timeframe of investment i.e. weekly or monthly and the asset to invest in. Rest the SIP will take care of everything.
Vault
A bullion vault is a secure facility where precious metals such as gold, silver, platinum, and palladium are stored. These vaults are specifically designed to protect the valuable metals from theft, fire, and other potential hazards. Bullion vaults are often operated by banks, security companies, or specialized storage facilities, and they offer a high level of security with advanced features such as reinforced concrete walls, steel doors, CCTV cameras, and round-the-clock security personnel. Bullion vaults are commonly used by investors, traders, and institutions to store their precious metals holdings. At GoldLane we store the Gold for you in insured vaults which are independently audited.
Check out the latest gold rates here:- https://www.goldlane.in/rate/
Disclaimer:- The Author(Shivank Goswami) is an independent multi-asset class Investor and Trader, and not a registered Investment Analyst and Advisor. This article has been written for educational purposes only and should not be considered as an Investment or Trading Advice. Kindly contact your authorized stock advisor before taking any trades or investment decisions. Past performance is not a guarantee for a future return, nor is it an indication of any future performance. The information contained in this article has been compiled from a variety of official sources and is subject to change at any time without notice. Both the Author and GoldLane give no assurance or warranty that information on this site is current and accurate, and take no responsibility for matters arising from changed circumstances or other information or material which may affect the accuracy of the information on this article.
