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Physical Gold vs Top Gold Mutual Fund: Gold is considered the best hedge against inflation. Investors also show keen interest in buying gold during market uncertainty and geopolitical tensions. Gold is suitable for investors with a long investment horizon. But investors also buy gold in different forms for short-term gains. They purchase gold in its physical form as well as in digital form. The purpose of both investments is to benefit from gold’s price appreciation. Know more about physical gold and gold mutual fund investments and which of the two has given a higher return on a Rs 10 lakh investment in each.
Physical gold as a form of investment
In India, physical gold is more popular as a form of ornament than as an investment form.
People buy it as jewellery, but they also purchase it as a form of investment.
Specially gold biscuits and rods are bought for investment purposes.
The purest form of gold is 24-carat gold, which is 99.5 per cent pure.
The price of physical gold can be different in different cities because of the supply and demand factor and tax rates.
Gold mutual fund investment
Gold mutual funds invest in gold ETFs, which, in turn, purchase physical gold or related assets.
Gold ETFs track the price of very high-purity gold.
So, gold mutual funds also track the price of physical gold.
Investors who don’t want to own physical gold but want to benefit from its price appreciation invest in gold mutual funds.
Unlike the rate of physical gold, the price of gold mutual funds is similar at all places.
They can be bought online through mutual fund websites and other investment platforms.
Physical gold price appreciation in 1 year
We are taking the spot gold price of Mumbai today. The price is Rs 95,510/10 gm.
The price 1 year ago of the same purity of gold was Rs 74,620.
So, the price of gold has increased by 28 per cent.
It means the value of gold worth Rs 10 lakh has grown to Rs 12,79,951.76.
The estimated net profit is Rs 2,79,951.76.
Value of Rs 10 lakh investment in top gold mutual fund in 1 year
Quantum Gold Savings Fund Direct-Growth is the top gold mutual fund with a 24.44 per cent annualised return in 1 year.
A Rs 10 lakh investment made in the fund 10 years ago is worth Rs 12,44,000 now.
It shows that physical gold has helped investors earn higher profits.
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