Gold is one of the favourite investment avenue for every Indian from ancient time. It ha scharm that none came compared to. Gold must be a part of one's investment portfolio in a whole by about 10-15%. So where to buy??
From Bank???- I don't think its a wise descision as you will get less on selling in market. However it gives peace of mind for purity. (Cost of Purchase is very high)
From Jewellers???- Again concerns are: Purity & Safety .
Gold Funds???- Gold Fund are having Gold as underlying assets. You are purchaing gold in Paper only. So what you get??- Peace, safety, but mssing the feel of possession!
So, what may be the verdict
From investment prospective it is always wiser to buy gold by a medium which is reliable, safe ,saleable (Liquidity), cost effective and gold funds score on all these aspects.
Earlier Gold fund can be bought only through demat account which was more cost effective ( ignoring the charges for demat) as compared to Gold fund floated by one of the MF company which is FoF. This will add to the expense ratio of the fund which may be around 1% additional to expense ration of gold ETF. This however give flexibilty of Lower ( as low as Rs. 100 pm) and Systemetic Investment.
So be informed before investing.