Should you invest in Sovereign gold bonds or gold ETFs?
Both the gold bonds and ETFs will allow Sunita to invest in gold on paper, rather than buy physical gold. But she must remember that even though the gold bonds are backed by the Government of India, the returns are linked to price movements in gold, and are therefore not guaranteed. In this respect, both ETFs and sovereign bonds carry similar market risk. The values of the gold bonds and ETFs are based on the gold price of .999 purity and .995 purity respectively.