Three ways you can invest in gold
Are you considering gold as a possible investment? Will it protect you against financial uncertainty? Gold is a solid investment; its value cannot be influenced by government policies. The price is driven by supply and demand. As the value of the dollar falls, gold value will actually rise.
Want to know how to invest in gold? Here are a few suggestions.
Gold bullion: There is nothing that matches the tangible satisfaction of owning physical gold.
Gold bars: The term gold bullion often conjures up visions of stacked bars of gold. Gold bars come in several sizes, from 1 gram bars to bars weighing several pounds. Gold bars are the favored choice among investors.
Gold coins: Gold coins have long been in use all over the word as currency. Now, these coins are minted by the government not as currency, but as a commodity. Private mints can only produce gold bars or rounds; they cannot mint coins. So, gold coins give the added satisfaction of having been minted at a recognized national mint. Gold coins sell at a slightly higher premium than gold bars.
Gold prices are based on the spot price of gold, with a premium added. As spot prices vary, the price of gold also changes often. Watch the daily gold price to know the right time to sell your gold if you need to.
Gold exchange-traded funds (ETFs)
These are special types of ETFs which track the price of gold. Right now, there are three backed Gold ETFs in the United States:
SPDR Gold Shares
iShares Comex Gold Trust
ETFS Gold Trust
SPDR Gold Shares is the most popular Gold ETF, and iShares Comex Gold Trust is the cheapest. ETFS Gold Trust, which has its gold bullion stored in Switzerland, is the newest. It gives investors choices of different types of gold. Currently, one share in each of these ETFs equal 1/10th of an ounce of physical gold.
Gold mutual funds
Like equity mutual funds, these funds also hold portfolios of stocks in various companies. The difference is that all these are gold mining companies.
Senior gold stock
Most of these stocks are in well established, large mining companies. These companies have a record of working consistently productive mines. These are called senior gold stock.
Junior gold stock
If you have high risk tolerance, you can own these speculative stocks. These are stocks in new mines at the exploratory stage. These are small to medium investments, and very risky. They have the potential to create huge returns if they do strike gold. But, they may not discover any precious metal and you stand the risk of losing your investment.
Gold options and futures
These investments rely on the future price of the underlying asset. The options market is complex and needs investors with good knowledge and an appetite for risk.
Many investors suggest buying gold bullion as the best way to invest in gold. You can buy gold bullion online through established dealers.