VARIOUS HUES OF GOLD

PHYSICAL GOLD: Gold coins, bars, bullion and gold in ornamental form are physical gold. These are the purest physical form of gold that can be bought or sold and used to make jewellery. There are, however, security concerns when buying physical gold. GOLD ETFS (EXCHANGE TRADED FUNDS): These are financial instruments that have gold as an underlying asset. These are listed on the stock exchange for trading and investors can buy units of gold ETF that are backed by physical gold. This is an instrument monitored by market regulator SEBI. These are transparent and safe investment options. You need a demat account to invest in them. SOVEREIGN GOLD BONDS (SGB): Periodically offered by the RBI on behalf of government of India. These are securities denominated in multiples of grams of gold and are available through public and private sector banks. The returns on these bonds are pegged to the price of gold and guaranteed by GoI; they do not have physical gold as an underlying asset. SGBs come with 8-year tenures. Investors can redeem them after 5 years. SGB also earn a 2.5 per cent interest GOLD FUND OF FUNDS: Gold FoFs invest in gold exchangetraded funds to do away with the requirement for a demat account when investing in a gold ETF.