What’s inside:
This article discusses SEBI’s warning on digital gold, explaining its risks and suggesting safer investment options.
SEBI has issued a warning to investors about the risks of investing in ‘Digital Gold’. This comes as the price of physical gold has reached all-time highs this year.
On November 8, SEBI announced that some digital platforms are promoting ‘digital gold’ as an alternative to physical gold. However, these digital gold products are not regulated by SEBI and pose risks to investors, including operational and counterparty risks.
Investors are advised to choose SEBI-regulated products like gold ETFs and electronic gold receipts. These regulated options ensure investor safety and can be accessed through SEBI-registered intermediaries.
Digital gold allows users to buy and sell gold electronically without physical storage. However, it is not regulated, which means there are risks involved. Prices can vary between platforms due to additional fees.
Investors should consider regulated options for gold investment, as gold ETFs and derivative contracts are becoming more popular in India, showing significant inflows recently.
Summary:
- SEBI warns about the risks associated with digital gold.
- Digital gold is not regulated and poses significant risks to investors.
- Investors should prefer SEBI-regulated products like gold ETFs.
- Digital gold allows for electronic buying and selling without storage.
- Gold ETFs and regulated options are becoming more popular in India.
