Electronic Gold Receipts (EGR) – have you heard of them? Gold in electronic form with trading, clearing and settlement features similar to any security is called EGR. Recently BSE launched EGR. EGRs (Electronic Gold Receipts) will be traded in BSE.
EGR is intended for all the market participants like retail investors as well as commercial participants like the Jewellers, banks, importers, refiners, bullion traders etc. The benefits of EGR according to BSE website:
- Effective electronic and transparent platform for bullion trading
- Assurance in quality of gold
- Settlement guarantee to investors
- Fungibility of gold delivery (You can do city to city transfers)
Courtesy BSEIndia site, the transaction flow below.
** images source bseindia.com
Trading unit is 1g, but delivery unit is 10g.
Firstly, the biggest advantage I can see for a retail investor is ability to buy bullion from a trusted source at a fair market price. Also if we have in our bank locker in City A some bullion, this can be transferred safely to the EGR and then can be easily taken delivery at a different city.
Finally, for a retail investor is it good to buy EGR? Personally in the accumulation phase of gold, I will encourage investment in Sovereign gold bond fund. When you need to take delivery, sell the SGB and get the physical gold through EGR route.
