How to Open a Gold Trading Account Online?

Gold trading is nothing new and with the high value of gold prices, the time is ripe.  There are many trading options these days starting from the stock market, but buying and selling gold is something that people are exploring now with great gusto. The main reason is that you can trade in gold which is a very high value item without bothering about security, keeping it safe and the huge amount of costs involved. Options for trading in gold have been extended to dematerialized forms also.

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Twice a week transactions

In recent times, gold trading in India have been introduced by the Multi Commodity Exchange in Mumbai where, in conjunction with the World Gold Council, you can settle within a week. As an investor, you can buy gold at a price determined by the Bullion Markets Association and London Gold Exchange, and import it into the country. Transactions in gold take place two days a week, on every Wednesday and Tuesday.

You can just pay up and take delivery of the gold, or hold the gold as long as you wish by keeping it in the demat account created for the purpose of gold trading. The separate demat account is a commodity or a gold demat account that you can open any time you want. It is a similar account used for trading in stocks and the price feature is very close to the spot market as well. You can avail of a settlement which is usually made by taking into account the prevailing price on the given day.

You have to pay margin money that would amount to 5 percent of the value straight away including a 0.5 percent brokerage. The brokerage is payable at a percentage of the gold. If a 100 gm of gold costs Rs 65,000, you will have to pay Rs 32500 of margin money and brokerage charges as well. For keeping the gold in safe custody, you will be charged 1 per cent per annum of the total price. The charges are usually arrived at on a weekly basis for payable every month.

Keep the gold in demat

If you want to keep gold or money in a bank’s vault, the charges are comparatively much higher. The safety vaults or the custodian, the National Securities Depository Limited, charges lesser amounts making it easier for gold investors to buy and sell. You can take delivery immediately according to the contract or keep it as long as you want by paying the charges upfront. If you are not willing to take delivery at the end of the period, you can defer and keep the gold in a demat account.

It is similar to selling the contract after paying the total cost. Buying and selling in the form is very convenient and investor-friendly as well compared to buying from the bank. But in the case of a bank, you cannot sell it back. The price is very near to the spot price compared to the usual contracts in futures offered by the exchanges. There are many delivery centers in India like Kolkata, Mumbai, Ahmedabad and Delhi. With the growing popularity in gold trading, chances are that more centers will be opened shortly.

Bu gold futures contracts are restricted to only two centers, Ahmedabd and Jaipur. There is a gold trading boom underway in India at the moment. Many global banks are set to launch programs to kick start their gold trading in India and there is online trading in gold as well. Many global companies are being attracted by the new boom and the industry has forecasted golden days ahead.