In terms of investment, gold has always been classed as a solid place to put your money but purchasing gold bars is not always a simple process. However, there are options available for investors when it comes to gold.
The value of gold is due to its rarity but it is still seen to be a good way of investing even when currencies are struggling. Supply is low but there is a high demand and this means that it holds its value extremely well, but how do you gain access to it? Read on to find out more.
Gold ETFs offer a way of accessing gold without having to trade it directly or physically. The ratio of total expense on ETFs are lower than ever due to competition which makes them great value for money. They operate by following the gold spot price with some being supported by physical gold with other trading future contracts based on the cost of gold. There are risks involved with this and they can perform differently to the commodity itself while others follow the price of shares of gold miners.
Gold Mining Stocks provide investors with access to the price of gold indirectly. As the price of gold increases so does the gold miners share prices although this is the simpler version,
As gold increases steadily, companies in the gold mining industry will be encouraged although gold miners shares will not follow the same patter because there are a number of aspects to it. Profit can be affected by cost pressures along with failed exploration projects.
Shares can be traded but there are dealing costs involved so it is worth finding a provider that offers competitive prices while making it possible to access an array of markets. However, this is risky and research does need to be carried out.
Gold Funds are available from a number of big fund houses but you have to understand what you are purchasing. Some portfolios will comprise of miners of other metals and not only gold. Choosing a fund that is wide will provide you with exposure to a number of other sectors which includes gas and real estate which makes it possible to diversify.
Gold Bullion is an investment that is made for the long-term because it is not about making a quick profit. Owning gold physically is a great way of holding onto your capital when markets take a downward turn but they will offer no income.
Gold Jewellery can be a common way of investing in gold, especially in Asia and the Middle East. Gold Jewellery can be easy to sell on and there is usually a good correlation to the actual price of gold, however you won’t get as much value for money when compared to investing in coins and bullion. The value of the piece can also fluctuate depending on fashion trends at the time. Jewellery has more value as a completed piece so liquidating it for the pure value of the gold could actually lose you money on your original investment, once you have taken away the value of the stones and the craftsmanship of the piece.
If you are considering owning gold as a physical commodity, it is possible create an online account through a dealer who will hold the gold in a vault. They will then be able to find you a buyer when you decide that you want to sell. However, there are costs associated with insurance, storing the gold, tax, dealing and transportation when the time comes to take your gold bars from a vault.