How Has Digital Gold Trading Influenced the Commodity Market?
Different types of investment vehicles are available for building wealth. You can try investing in equity shares or derivatives available on stock exchanges. On the other hand, you can try investing in futures contracts available in the commodities market.
Online commodity trading has come a long way in the past few years. In 2023, people will be more inclined towards digital gold trading, which is free from hassles. Before you trade the precious yellow metal, you must know different options, from digital gold to futures contracts. Read on to understand how the latest digital gold rush is taking over the commodities market.
Understanding the Traditional Commodities Market in India
Similar to shares, bonds, and derivatives, commodities are also listed on stock exchanges. These are crude oil, natural gas, wheat, corn, gold, feeder cattle, and other materials. When you trade these commodities on stock exchanges, you aren’t buying them in physical form. Instead, you buy futures contracts that mention a particular time to sell the commodities. The contract also includes a fixed price in the future to sell the commodities. The same happens when you buy futures contracts on gold on stock exchanges. You are agreeing to sell gold at a fixed price in the future. However, this form of trading is not similar to digital gold trading in India.
To invest in gold-based futures contracts, you will need a brokerage platform. Usually, stockbrokers in India offer trading/brokerage platforms to invest in commodities. They allow you to access different stock exchanges in India and check the features of different gold-based futures contracts. Besides futures contracts, you can also invest in options contracts and earn returns. Gold-based options contracts will differ from futures contracts in India. For many years, this form of gold trading has been prominent in India. Of course, you can buy gold in its physical form, but it has nothing to do with online commodity trading. Let us now understand the latest craze of digital gold in India.
Understanding the Digital Gold Rush in India
Digital gold trading is the recent trend in commodity trading. Although digital gold trading has been around for a few years, it has been picking pace lately. With digital gold trading, you don’t have to hold the commodity in its physical form. You will buy and sell gold in its digital form via specialised trading platforms. With the digital trading concept, you can buy and sell gold in smaller amounts. Stockbrokers offer special trading platforms that allow you to invest in digital gold, ETFs, and gold-backed tokens. In some cases, you can invest in gold ETFs and mutual funds via a Demat account. In recent years, many people have preferred digital gold over commodity futures trading. Here are the advantages of digital gold trading in India:
Access to Gold Market Information
With digital gold trading, you don’t have to connect with different sellers to know the current rates. You can know the rate of gold in the market via the digital platform providers by your stockbroker. Since you will have access to real-time gold prices, you can make better and more informed trading decisions.
No Storage Expenses
You don’t have to search for a bank locker to store the digital gold. You won’t even incur transportation costs by buying or selling digital gold. Your digital gold will be stored securely without the risk of theft.
You aren’t forced by a contract to sell the gold on a definite date. You can sell digital gold anytime and earn returns. Not many investments are as liquid as digital gold in India. It can help during financial emergencies when you need funds in quick succession.
In a Nutshell
Commodity trading has evolved in the past few years in India. The latest craze is digital gold trading, where you buy or sell gold without moving an inch. Don’t forget to choose a reliable broker for digital gold trading in India. Invest in digital gold and earn returns now!
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