InvestorQ : What are the major challenges that people face while holding on to physical gold?
Priyanka N made post

What are the major challenges that people face while holding on to physical gold?

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NISHA Nayak answered.
3 years ago
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Interestingly, most households prefer to hold gold in physical form due to privacy and sentimental reasons. In fact, even bank lockers are too common and people prefer to keep gold stacked at home or with the local jeweller. There are some serious challenges in holding gold in physical form. Here are a few of them…

Most households prefer to hold gold at home and that carries a huge risk. Alternatively, gold is also held in lockers but that has storage cost which adds up to quite a bit over the years. Also the carrying of gold to and from the bank entails risk. Even you must remember that the bank does not guarantee the safety of gold in the lockers and it is still kept at your own risk.

The second risk in gold is the loss in conversion and the concomitant making charges. When you hold gold in jewellery form, each time you convert the gold into bars or back to jewellery there is a loss you incur both in terms of loss of the quantity of gold and monetary costs in terms of making charges. These add to your overall gold holding cost.

The government has now set strict limits on the holding of physical gold. Any family that is found to be holding gold beyond such limits will incur penal action from the government and also further inquiries from the tax authorities. In fact, holding physical gold has become a lot more difficult after the process of demonetization.

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