Gold for Beginners: Terms You Should Know Before Investing
Most people delay their first gold investment for one reason-not money, but confusion. Spot price, purity, NAV, LTCG... the words pile up before you've even opened an app. So let's walk through it the way a friend would explain it over chai, in the order you'll actually run into these terms, from the moment you decide to invest to the day you eventually cash out.
Stop 1: Before You Buy Anything
Spot price is simply the live market rate of gold or silver right now, per gram. Every app, jeweler, and fund quotes around this number - it moves through the day, so the price you see at 10 AM may not be the price at 4 PM.
Purity, or karat tells you how much actual gold is in what you're buying. For investment purposes, 24K is generally preferred as it represents the highest purity. 22K contains other metals for strength and is commonly used in jewellery.
Stop 2: Choosing How You'll Invest
Once you know what you're buying, the next question is how. This is where most of the confusion actually lives, so here are the two terms that matter most.
ETF (Exchange Traded Fund) is a fund that trades on the stock exchange, much like a company share, and its price tracks the price of gold or silver. You'll need a demat account to hold one.
SIP (Systematic Investment Plan) just means investing a fixed amount regularly - usually every month - instead of one large payment. It's the same idea you may already use for mutual funds, just applied to gold or silver.
Here's the one twist worth knowing early: a regular SIP is usually rupee-linked, meaning you decide a fixed rupee amount, and the units get allotted in gold. A gram-linked SIP flips this - you decide the gold weight you want, and the installment amount adjusts instead. Shagun SIP by Axis Mutual Fund , is designed to follow this approach, where you can target as little as 0.1 grams of gold or 10 grams of silver a month, or set any custom amount above that. You choose to invest in Axis Gold Fund and Axis Silver FOF.
Same goal, different starting point - rupees first, or grams first.
Stop 3: Watching Your Investment Grow
NAV (Net Asset Value) is the price of one unit of a mutual fund on a given day. If you're invested in a gold mutual fund, this is the number that tells you what your units are currently worth.
Making charges is the cost of labor added when raw gold is turned into jewelry. They typically don't apply if you're buying ETF units or running a SIP - which is one reason SIPs and funds often cost less than buying jewelry as an investment.
Stop 4: When You Decide to Exit
Holding period is simply how long you've kept an investment before selling it. It matters because it decides which tax rate applies to your profit.
LTCG (Long-Term Capital Gains) is the tax on profit once you've crossed the qualifying holding period, based on current tax regulations, currently a flat 12.5% for most gold and silver investments held long enough, without the older indexation benefit.
Quick Glossary, For When You Forget
Bookmark this table. You'll probably reread it the first few times you open a gold investing app.
Tax rules can change with future budgets; always check the current provisions before investing.
Where this leaves you
You don't need to memorize every term before you start - you'll pick most of these up naturally within your first few months. The one decision worth making upfront is whether you want to think in rupees or in grams. Shagun SIP by Axis Mutual Fund is built for the second approach: you set a gold or silver target investing in Axis Gold Fund and Axis Silver FOF, starting from 0.1 grams of gold or 10 grams of silver, and your monthly debit adjusts to the spot price automatically.
Investors are requested to note that Axis Asset Management Company Limited has temporarily restricted certain subscription transactions in Axis Gold ETF and Axis Gold Fund with effect from June 8, 2026.
For Axis Gold ETF, subscription transactions by large investors for an amount exceeding ₹25 crores directly with Axis Mutual Fund shall not be accepted. However, transactions by Market Makers / Authorized Participants shall continue.
For Axis Gold Fund, no lumpsum subscriptions or switch-ins aggregating to above ₹10 lakhs per PAN per month shall be accepted post the cut-off time (3:00 PM) on June 11, 2026. Transactions exceeding the specified limit may be rejected.
The above restrictions are temporary and shall remain in effect until further notice.
*Note: Investors will be bearing the recurring expenses of the scheme in addition to the expenses of underlying schemes in which Fund of Funds scheme makes investment.
Axis MF/AMC is not guaranteeing any returns on investments.
The units allotted may not correspond to the exact grams due to price fluctuation and other charges.
Please click below for more information:
Mutual Fund investments are subject to market risks, read all scheme related documents carefully.
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