Digital Gold's Hidden Costs Threaten Investor Returns
Investors seeking gold exposure in 2026 may want to reconsider their reliance on digital gold, given its regulatory status and costs. Digital gold allows investors to buy small quantities of gold online without visiting a jewellery shop or handling physical gold. However, the convenience comes with a price tag, including a 3% GST, platform markups, delivery charges, redemption fees, storage-related charges, and minimum redemption requirements.
The displayed gold price is not the only cost investors should consider. A common mistake is to look only at the price at which gold can be purchased. Instead, investors should check: Purchase price → GST and other charges → Selling price → Final amount received. Even if the market price of gold rises, a wide buy-sell spread and additional charges can reduce the actual profit.
Investors looking for an alternative to digital gold may want to consider Gold ETFs, which operate within the regulated securities market. Unlike digital gold purchases, Gold ETFs do not attract the 3% GST charged on the purchase of digital gold, although investors should consider brokerage, fund expenses and other applicable costs.