SEBI warns investors to be cautious before buying gold online

SEBI Warns Investors:  Market regulator SEBI on Saturday warned investors against investing in digital or e-gold products. According to SEBI, these products are outside its regulatory framework and therefore carry a high degree of risk. This warning was issued after SEBI observed that several online platforms were aggressively promoting digital gold as an easy alternative to physical gold.

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SEBI stated that digital gold is neither notified as a security nor regulated as a commodity derivative. Consequently, it falls completely outside its regulatory coverage. SEBI clarified that investor protection provisions applicable to regulated securities do not apply to such unregulated digital gold schemes.

Where can you invest your money?

SEBI advises investors to invest in gold only through SEBI-regulated instruments. These include gold ETFs, electronic gold receipts, and exchange-traded commodity derivatives. These products trade on recognized stock exchanges and fall under SEBI regulations. Investments should made through registered intermediaries. Trading through unregistered individuals carries a higher risk of loss.

Purchasing Digital Gold

In the past few years, several private companies have started selling digital gold through apps and websites. Companies like Tata Group's CaratLane, SafeGold, Tanishq, and MMTC-PAMP offer digital gold. Apps like PhonePe, Google Pay, and Paytm, in partnership with these companies, also offer users the option to purchase gold online for a few rupees.  According to CaratLane, digital gold allows customers to purchase gold online, track it, and redeem it for jewelry or gold coins when needed.

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