The gold on Tuesday rose by Rs 160 to hit an all-time high rate of `22,360 per sovereign in the state.
However, there are many who are making merry on the spiralling prices of the yellow metal.
The Kochi-based homemaker Bini Suresh has stopped worrying about the skyrocketing gold prices ever since she started investing in e-gold two years back. According to her, she could earn profits ranging from Rs 500 to Rs 1,000 per day when the prices maintain an upward trend.
Paper gold - gold in its electronic formats like e-gold and gold exchange traded funds(ETF) - is wooing an increasing number of investors in Kerala who choose alternative gold investment options. According to some of the Kerala-based brokerages, around 60,000 people in the state are active investors in paper gold.
Reejo Jose, a middle-level executive with a private financial services company, has never invested in gold ornaments. With 40 grams of gold in his demat account at the time of his marriage six months back, he started investing in gold every month on a regular basis.
“When the price of gold started its upward journey, I explored another investment option and started investing in e-gold two years back,” said Reejo.
In the last two-and-a-half years, gold prices have increased by more than 120 per cent. Investors like Bini and Reejo, who started off investing small amounts are reaping the advantages of the upward spiral of prices. When in need, they have the option to convert the ‘virtual’ gold to the physical format.
Brokerages have also made tie-ups with major gold jewellers. On producing the demat slip, electronic gold can be exchanged for gold ornaments. National Spot Exchange Limited (which introduced e-gold two years back) is now giving one-gram gold in physical form. Apart from that, investors can also pledge their gold in electronic form to avail a loan. Most of the NBFCs are offering this facility now.
“Through paper gold, one can invest in the name of his/her new born babies. People are coming to us asking for e-gold and gold ETF investments. With loan facility available against paper gold, the demand has increased,” said T B Ramakrishnan, CEO, Sharewealth Securities Ltd, a Thrissur-based brokerage.
One can start investing in paper gold with a minimum amount of Rs 1,500. The steps are simple - open a demat account and start buying gold. This will cost you Rs 300 as maintenance charge and brokerage charges which is in the range of 0.5 to 1 per cent. Other requirements are ID card, PAN card and bank account details.
Apart from e-gold, there are 14 stock exchange-listed gold ETFs in India. One can start investing in 0.5 gram gold also. Earlier, physical delivery of gold ETF was not possible. Now the situation has changed and one can convert the ETF units to gold coins.