The Gold value has witnessed a steep plunge in the last few weeks. The price is still not very stable and it is expected to find a new low in the coming days before a consolidation phase starts. At this point it is advisable to opt for SIP in gold ETF or a customized systematic buying in NSEL gold.
Physical gold is trading at a hefty premium over the actual price because the jewelers are sitting with older purchase and therefore they are reluctant to sell at a loss. On the other hand you will easily get ETF or NSEL gold at the actual price and without any risk.
In demat you can even buy 1 gram at a time but while buying in physical form you won’t get a flexibility of size. The buy and sale price of physical gold are different i.e. usually the jeweler sells physical gold at premium rate but when you will go to the same jeweler for a resale then he would buy it at discount price.
In demat form you can sell the gold at prevailing market price immediately. There are some special benefits of investing in ETF such as LTCG tax after 1 year, no wealth tax, high liquidity and low transaction cost.
So it’s better to opt for a SIP in gold with a ETF/demat form.