GLOSSARY

Allocated gold

Refers to physical bullion that is stored in a professional vault for safekeeping whose outright ownership belongs to the investor of the stored gold.

Asset class

Asset class is an investment option available to the investors. Gold is a popular asset class in which many prefer to invest.

BIS Hallmark

It is a hallmarking system for gold and silver jewellery in India. Bureau of Indian Standards (BIS) Hallmark is used for certifying the purity of gold/silver. BIS Hallmark on a gold product certifies that it complies with the standards laid down by the Bureau of Indian Standards, the national standards organisation of India.

Bullion

Bullion includes precious metals in the form of bars of minimum 99.5% purity.

Bullion coin

It is a coin, which possesses a symbolic face value and trades at a price with respect to its intrinsic value.

Capital appreciation

Refers to appreciation or increase of the original capital amount invested in gold. In India, historically, gold prices have shown general tendency of appreciating.

Capital gains

Capital gains refer to the gains that the investors in gold have made from the sale of gold. Capital gains on gold are taxed in India. Therefore, one must make sure to ask for a proper bill while purchasing gold.

Commodities market

It is a market where investors trade in primary products rather than manufactured products. Agricultural products such as wheat, coffee, cocoa, and sugar are called soft commodities whereas mined commodities such as gold and oil are called hard commodities. MCX in India, COMEX in London, and NYMEX in the US are popular commodity exchanges.

Direct investment

Direct investment refers to direct purchase of gold in physical forms such as coins, bars, and jewellery.

Entry load

It is the entry fee charged by the gold ETF when an investor wants to invest in that mutual fund. The mutual fund calculates this charge as a percentage of the Net Asset Value (NAV). For instance, if NAV is Rs.20 and the specified entry load is 2%, the cost price per unit will be Rs. 20.4.