1 hr ago
Digital gold booms as experts warn investors about hidden risks
Digital gold lets people buy tiny amounts of gold through phone apps.
Gold ETFs are another way to invest in gold and trade on stock exchanges.
Many people like digital gold because it is easy to buy and can sometimes be delivered physically.
However, digital gold is not supervised by SEBI or the RBI.
This means investors may have fewer protections if a platform has serious problems.
Digital gold can also become expensive because of taxes and buying and selling price differences.
Gold ETFs usually have clearer annual fees but require a demat account and trade only during market hours.
Investors should choose based on whether they want financial returns, convenience or physical gold.
Digital gold purchases in India averaged about ₹2,500 crore monthly from June to August, while August 2026 purchases rose 110% year-on-year.
Gold ETF inflows increased 67% month-on-month to ₹2,597 crore in August, according to the World Gold Council.
Digital gold offers small investments, physical delivery and app-based convenience, but it is not regulated by SEBI or the RBI.
Digital gold can involve a 3%-6% bid-ask spread, 3% GST and possible 5%-10% physical-conversion charges.
Gold ETFs are better suited to purely financial investors, while digital gold may suit those seeking physical delivery or very small investments.
- Who
- Indian investors, digital-gold platforms, gold ETF providers and industry experts quoted in the article.
- What
- Strong demand for digital gold and gold ETFs has prompted comparisons of their costs, convenience, regulation and risks.
- Where
- India, through digital platforms and stock exchanges.
- When
- Demand data covers June to August, with August 2026 figures cited; the article does not specify its publication date.
- Why
- Investors are seeking accessible gold exposure, while experts are highlighting differences in safeguards, costs and physical-delivery options.
Digital-Gold Advocates
ETF and Consumer-Risk Advocates
Convenience and accessibility
Digital-Gold Advocates
Digital gold can be purchased in very small amounts through payment apps, without a demat account, and is available 24/7.
ETF and Consumer-Risk Advocates
Gold ETFs are more suitable for investors seeking purely financial exposure, although they require stock-market access and trade during market hours.
Physical ownership
Digital-Gold Advocates
Digital gold can offer physical delivery and may allow investors to earn a yield in grams of gold through leasing.
ETF and Consumer-Risk Advocates
Physical conversion can add making charges of around 5%-10%, and investors should examine how the underlying gold is stored and delivered.
Investor protection
Digital-Gold Advocates
DPMACI standards are described as requiring full physical backing, independent audits, insured custody and trustee protection.
ETF and Consumer-Risk Advocates
Digital gold lacks SEBI and RBI oversight, while gold ETFs have SEBI-regulated structures, physical audits and a better recovery mechanism in insolvency cases.
Cost and time horizon
Digital-Gold Advocates
Digital gold may suit investors making very small purchases or those likely to hold for more than two years.
ETF and Consumer-Risk Advocates
Gold ETFs generally have lower and more visible ongoing costs and are recommended by one expert for investors with a one-to-two-year financial-investment horizon.
Key facts
- Digital-gold demand
- Averaged around ₹2,500 crore per month from June to August.
- August digital-gold growth
- Purchases rose 110% year-on-year in August 2026.
- Gold ETF inflows
- Rose 67% month-on-month to ₹2,597 crore in August.
- Digital-gold regulation
- Digital gold is not governed by SEBI or the RBI.
- Digital-gold costs
- A 3%-6% bid-ask spread and 3% GST can reduce the investment by 6%-9% immediately after purchase.
- Physical conversion
- Making charges for small coins or holdings can be around 5%-10%.
- Gold ETF costs
- Typically includes an annual expense ratio of roughly 0.3%-0.8% and a small brokerage cost.
- Industry framework
- DPMACI was formed by industry participants as a self-regulatory organization for digital precious metals.
Quotes
Harsh Vardhan Dawar
Founder of Wealth Cafe and finance professional.
“This means any grievances need to be managed with the private app directly, without any regulatory mechanism in place. In case of bankruptcy or insolvency, ETFs have a better recovery mechanism in place.”
livemint.com
“For many consumers, buying digital gold feels similar to buying a gold coin or jewellery online, so the regulatory distinction may not be top of mind when making small, recurring purchases.”
livemint.com
Sources
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