Last Updated on May 20, 2021 by John Fischer
Investing in gold is a great long-term financial option. It might seem that the price of gold is unstable right now. However, gold has always held up its value over the years. In the past, gold has also proven to be a security against the turmoil of inflation and depreciation of currencies, making it one of the best investment assets out there. Let’s discuss how you can invest in gold.
Physical Gold Investment Options
Most people think of gold bullions when investing in gold—chunky gold bars left inside a bank vault.
Gold bullions come in various options for investment. It ranges from a few grams to 400 ounces. Mostly though, it is available in one- and ten-ounce bars. The price of gold has been high lately, touching $1,900 in September of 2020. If you invest in gold bullions, it is imperative to stay up to date with gold prices.
The most common gold coins come in one- or two-ounce forms. Other options such as half- or quarter ounce coins are also available. It is important to remember that many collectible coins trade at a premium compared to the price of gold due to their rarity. If you wish to invest in gold coins, find a reputable dealer with a license.
You can also invest in gold that is wearable or was once worn by someone. Buying gold jewelry comes with additional considerations.
Firstly, you need to make sure that the gold is authentic, so it is important to buy from a trusted dealer. Secondly, the price may vary depending on the company that made the jewelry. The additional price you pay can be somewhere from 20% to three times the value of raw gold.
Purchasing Stock of Companies in The Gold Business
A more straightforward way of investing in gold is buying the stock of companies that mine, refine or exchange gold. For this, you are better off investing in a brokerage account. Bear in mind, buying shares in gold companies exposes you to the same risks as investing in any other stock. The price of the stock will be affected by the gold price and the company’s performance.
Investment in Gold Mutual Funds or Gold ETFs
Investments in mutual funds and ETFs are considered better by many people as they provide long-term stability. These investment assets aim to provide better returns than gold stocks while allowing you to liquidate your investment much easier than physical gold.
Keep in mind, like gold stocks, you are investing in a contract rather than physical gold, which may mean that performance of these items may differ from that of physical gold.
Gold has stood the test of time for many centuries, and there is no reason why it will fail to do so in the future. An investment in gold will most likely yield benefits in the long run.
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