You know that gold can be bought in many ways like jewelry, bars, through ETFs. Now, there is a way to buy and invest gold through a new system called EGR. The listing is done through the window called ‘Electronic Gold Receipt – EGR’ in Mumbai Stock Exchange. It can be bought and sold. How do you ask?
The gold to be invested is stored in a lump sum in a gold storage room called a ‘vault’. Along with the gold deposited in it, a receipt will be issued in electronic form by the company running the ‘Vault’. Units will be credited to ‘Demat’ account along with such receipt. The units issued are listed and traded on the stock exchange based on the receipt issued for the amount of savings in the ‘vault’. You can buy and sell these units just like you buy and sell stocks.
Anyone trading in the stock market can buy and sell gold through this EGR. Apart from these, all importers, banks, gold jewelery manufacturers and jewelers can buy and sell.
Since trading is done on pure 999.995 graded gold bullion based storage gold, the price will fluctuate accordingly. In this, trading trade is fixed at a minimum of 1 gram (or its multiples) and delivery trades are fixed at 10 grams to 100 grams (or its multiples). Mumbai Stock Exchange started trading last Diwali.
Consumers who invest through EGR can hold their gold in electronic form for as long as they want.