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Amazon Launches Digital Gold Platform

Author: Jon Clarke - Bullion & Economics Editor

Published: 21 Aug 2020

Last Updated: 3 Sep 2020

Synopsis

As we prepare to launch our digital gold and silver brand, DigitAul, it’s interesting to see that Amazon have launched a similar product in India.

Amazon Launches Digital Gold

What Is Digital Gold? 

Digital gold is a way of purchasing gold online, but without the added hassles of home storage, or additional fees that come with private security and insurance premiums. Other benefits of digital metals include it being available 24 hours a day, 7 days a week so you don’t have to wait until the markets open to make your purchase.

What are the Risks?

One of the main risks associated with digital gold is the uncertainty of what physical product you own can it be redeemed, and can you have your money back if you decide to sell?

By comparing products, it makes it easier to see what the two companies offer. 

Chard’s DigitAul vs. Amazon’s Gold Vault 

Firstly, it is important to point out that Amazon’s Gold Vault is currently only available in India, so for the time being, Gold Vault will not be available to many UK customers. This may change depending on Amazon’s success with the product, but we believe that Chard’s can offer a better overall product. 

Gould Vault - Pros

  • Offers .9995 purity
  • Simple payment by credit or debit card 
  • Minimum transaction of 1 rupee (1 pence) / Maximum 2g of gold without due diligence (KYC) checks. 
  • Physical gold vault insured by Brink’s 
  • Money from sales to Gold Vault take between 15 minutes to 48 hours to receive. 

Cons

  • Amazon merely facilitates the transaction. The purchase/sale of gold is through the “SafeGold” brand of DGIPL (Digital Gold India Pvt. Ltd.) 
  • Large multinational corporations will have executive boards, shareholders, creditors etc. A “pecking order” of many levels means that customers are among the last people paid in cases of company insolvency.
  • Physical delivery is “not yet possible” meaning the trade is based solely on trust.
  • As with any gold exchange-traded fund (ETF), companies are not legally required to guarantee their holdings. 
  • Limited recourse  

DigitAul - Pros

  • DigitAul offers the purchase of both gold and silver
  • Payments made through online accounts 
  • As Chard’s have been trading for over 55 years, we have a significant stock holding as a hedge against risk 
  • We will back all digital gold purchases with our own stock 
  • Our stock is fully insured by Lloyds of London 
  • As a smaller family-owned company, we are able to offer market-beating premiums on gold and silver 

Cons

  • Minimum purchases of £10 
  • As a smaller company we do not have the international recognition of Amazon 

Summary

At Chard’s, we really value the benefits of investing in gold. Although we prefer physical gold, “digital” gold or ETFs certainly have their benefits in a modern economy, but we would always recommend learning as much about where your money is going before you make a decision. 

While Amazon’s product certainly appears to be attractive, there are undoubtedly pitfalls when entering into a new venture. One of the key benefits that we are able to offer, is a personalised service for any of your doubts and queries.  We are available to contact by phone on 01253 343081 , email or even face-to-face if you would like to drop by our Blackpool showroom (by appointment only). 

Further Reading

You may be interested in reading through our precious metal and coin news section.

Click to learn more about DigitAul and vaulted storage.

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