Safety of Digital Gold Kuvera via Augmont

General
1

How safe is it to buy Digital Gold from Kuvera which has Augmont as its Partner.

  • Does Augmont segregate and keep clients gold so as not to oversubscribe gold.
  • How is the counter party risk in this. Who are the trustees and insurers here. How well funded they are in case of an incident.

https://kuvera.in/explore/gold#buy

2

Such companies come and go vanish anytime …
Who is the regulatory body in case of any discrepancies?

1 Like
3

You should ask these questions to Gaurav from Kuvera instead of publishing here.
But if you want to invest in Gold, I would advise you to go for Sovereign Gold Bonds. You can’t invest in SGB from Kuvera though.

Benefits:

  1. You get 2.5% interest p.a. on your SGB investment, payable semi-annually. The interest earned would be added to your income and taxed as per your tax slab.
  2. Gold bonds are a form of security as they are issued by RBI in the form of the Government of India stock.
  3. The capital gains tax on the redemption of SGB has been exempted
  4. Indexation benefits for LTCG
  5. These bonds can also be used as collateral for loans.
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4

One can also buy sgbs from kite now.

5

But SGB’s have long lockin period also you can’t get physical deliveries.

Secondly incase of a currency crisis kind of situation where gold acts as a good hedge, its highly unlikely that government will service such liabilities.

I understand this can be asked to Gaurav but posted here incase our fellow traders and investors already knew this information.

6

What do you mean by this?

1 Like
7

@siva The question is self-explanatory.

8

I din’t get it, if that means government is defaulting then nothing can be safe, also now everything is digital, in that case if government wants it can even block digital gold.

9

Yes in case of currency crisis we enter hyperinflation and government can’t service liabilities in gold.

The case against SGB is it’s purely a govt guarantee not even backed by gold. Some mutual funds are also backed by gold eg. SPDR gold fund in US. But again all of these there is no physical delivery.

Digital gold , yes government theycan also ban it but since there is no lock-in (unlike SGB) we can get it out in early situations if such situation is developing.

Also not sure if a service like Augmont diversifies it’s political risk by keeping physical gold in multiple countries as govt in Britain as well as US has refused to service gold obligation to public in past so it’s a known risk to gold industry.

10

@amanfdk i am not an expert but if i am not wrong, I had read somewhere that in case of a national crisis and financial emergency, the govt. can even seize our bank accounts and freeze the fixed deposits .etc. Mostly during war it is done so. Mobilization of resources to protect the sovereignty. It happened in pre-independent India in 1945, during World War II, when India fought for the British. BTW, Govt. does not pay you back or refund the same after the situation is restored back to normalcy. You just get a certificate of your contribution towards the nation.

11

Considering they are not regulated they are not safe. Period.