Buying Gold

I recently read an article from about not buying gold from banks. I liked the article, since I was too thinking about it. Gold has been a standard and safe investment option from many many years. But there are many problems involved in buying gold. As the article mentions about issues regarding buying gold from bank, but I am even wary of buying gold from anyone else. How much can I trust a "Branded Retailer" or "Jweller". This is ofcourse true that a jweller or a retailer can provide a handsome variation in cost while purchasing gold, but what about the quality. Ofcourse now-a-days most of the retailers does provide some kind of certification. But its again a question of what kind of certification.

Another problem I have in buying gold is where to keep it safe? Ofcousre it is unsafe to keep it in the house. So one will think about taking a locker in a bank. But getting a locker is no easy process. There are lot of forms to be filled and one needs a account with the bank. Also most banks want some deposit to be placed in the account before they can open a locker and the deposit is something like 10,000 Rs. Also if you shift from one place to other, you need to close the locker in a specific branch and reopen it (going through the same cumbersome procedure). It is a real pain. How about following changes ?

-- The banks should re-purchase the gold if kept in the same condition (e.g bars or coins)
-- This re-purchase should be valid across all the banks. So a gold coin purchased from one bank can easily be repurchased by any other bank.
-- A device (as small as say mobile) to quickly identify the purity of gold. It can be extremely useful while purchasing gold.
-- A concept of dematerialised gold (similar to dematerialised stocks). So I log on to the bank website, purchase gold say 500gm using direct debit from my saving account, and instantly my account shows (500 coins, 1 gm each). If I want to re-deem the dematerised-gold, i go to the bank and get the 500 gold coins which I can use to say make a jwellery.


  1. Well, about the dematerialized gold, i am not sure.

    One factor which pushes people to buy gold, is its tangible nature.

  2. Ketan,
    Thanks for the comment. I do spend quite a lot of time. :)

  3. I am talking about "gold as an investment" and not in the form of jwellery. As an investment one would prefer gold bars or coins which does not need any labour charges as opposed to when you buy jwellery. This way tangibility would probably not comes into picture.