26th Mar, 2012

NSELs e-Gold units can now be converted into 1 gm gold coins

National Spot Exchange has now facilitated physical delivery in e-gold as minimum 1 gm lot, besides the existing options of delivery in denominations of 8 gms, 10 gms, 100 gms and 1 kg. This Move is to commemorate two years of launch of commodity investment product in demat. Since its launch e-Gold has offered the ultimate blend of both the forms physical and electronic with the alternative to invest in small quantities in demat account, the least being 1 gram of e-Gold. There is also the freedom to take physical delivery of gold via the exchange whenever required. In order to convert electronic gold units into physical gold, Investor must surrender the electronic units and apply for physical gold. The exchange, at present, provides the choice to exchange e-Gold units into coins/bars of 1, 8, 10, 100 gram and 1 kg and any combination thereof. It charges an amount of Rs. 100 each for conversion charges of 1 gram coins and Rs. 400 for conversion of 8 gram/10 gram coins. In case of 100 gram coins and one-kg bar, the exchange doesnt charge anything. In addition to these charges, one is required to pay VAT @ 1% throughout the country as well as Octroi charges to convert electronic units into physical coins. Octroi pertinent in Mumbai is 0.1 %. One has the choice to take the delivery of the physical gold at any place where NSEL has delivery centers. At present, the exchange has delivery centres in Kolkata, Chennai, Hyderabad, Jaipur, Mumbai, Ahmedabad, Delhi, Bangalore, and Kochi. While the trade is done for electronic unit, equivalent physical gold is kept by the in the exchange designated vault having purity of 995 and is fully insured. After its launch in March 2010, e-Gold has offered far better returns compared to other gold investment options. Since the launch e-Gold has given a return of 67.03%, which is the highest compared to all other forms of investments in gold. The latest move to allow e-Gold delivery in 1 gm denominations is a benefit that is unique to this product alone. No other commodity investment product in Gold available in India has this facility. Certain other features such as transparent pricing, seamless trading and zero holding costs have made this product a preferred investment option for retail investors and HNIs. In e-Gold, investors have found a unique way to park their money in gold without having to worry about purity or physical security that is inherent to jewellery and physical bullion. e-Gold in due course will succeed in transforming the way in which people invest in gold for long term and hold their gold. The concept behind e-gold is Relieving investors of the anxiety and concerns of storage as well as purity, making gold investment more organized and hassle free. Investing in gold through e-gold shall be more sensible for small investors. E-Gold is a cost-effective for investors with longer investment horizon.