Term (duration) of Investment: Varies Nature of Investment: Low risk. Gold is the safest investment option available. The potential reward far outweighs the minor risk. Profile of Investor: Ideal for the first-time gold investor or for someone just looking to set something aside for a rainy day.
Term of Investment: For the long term, even if the economy picks up, inflation will follow close behind. Which asset resists inflation? Gold. Nature of Investment: It’s low-risk. Experts agree that the investment-allocation pyramid is built on a low-risk base that includes gold bullion. Profile of Investor: Gold is a perfect component for a new investor’s portfolio.
Gold coins: Historic (pre-1933) gold coins tend to retain the most value, as these have numismatic value in addition to their gold content. Examples of historic gold coins that do not sell at an excessive premium over the gold price because they contain only 90 percent gold are the British sovereign, British guinea, Spanish escudo, French 20 and 40 francs, Swiss 20 francs, and American Gold Eagles ($10 face value), Half-Eagles ($5 face value) and Double Eagles ($20 face value). The British sovereign and the American Eagle gold coin are notable exceptions with 91. 66 percent gold content (or 22 karat). Other gold bullion coins include the Canadian Maple Leaf, the Australian Kangaroo, and the South African Krugerrand (which sparked the entire gold-coin-investment industry), [1] X Research source and the 24 karat Austrian Philharmonic. Gold bars: Gold is also sold in bars that are usually 99. 5 to 99. 99 percent fine (that is, pure gold). Popular gold refineries include PAMP, Credit Suisse, Johnson Matthey, and Metalor. You’ll see the names of these refineries stamped on the bars they process. Gold jewelry: The problem with buying gold jewelry as an investment is that you pay a premium for the craftsmanship and the desirability of the design. Any piece of jewelry marked 14 karat or less will be below investment quality, and any resale for the sake of investing will be impacted by the need to refine the gold. On the other hand, it is possible to pick up antique or vintage gold for very little at estate sales and similar auctions where a seller may not recognize the true value of the metal content or if people simply aren’t in the mood to bid much for it. Older pieces can carry more value due to their unique craftsmanship, so this can be a lucrative and enjoyable way to collect gold.
Examples of historic gold coins that do not sell at an excessive premium over the gold price because they contain only 90 percent gold are the British sovereign, British guinea, Spanish escudo, French 20 and 40 francs, Swiss 20 francs, and American Gold Eagles ($10 face value), Half-Eagles ($5 face value) and Double Eagles ($20 face value). The British sovereign and the American Eagle gold coin are notable exceptions with 91. 66 percent gold content (or 22 karat). Other gold bullion coins include the Canadian Maple Leaf, the Australian Kangaroo, and the South African Krugerrand (which sparked the entire gold-coin-investment industry), [1] X Research source and the 24 karat Austrian Philharmonic.
The American Eagle gold coin and the other coins listed above are made in four weights: 1 oz. , 0. 5 oz. , 0. 25 oz. and 0. 10 oz. Gold bullion bars are generally sold by the ounce and include 1 oz. , 10 oz. and 100 oz. bars.
See Buy Gold Online for details on how to invest in gold through online marketplaces. Jewelers sell gold jewelry, but if you decide to go this route, be sure to choose a reputable store that has been in business for a long time. Auctions can be another source of gold jewelry, but be aware that auctioned items are sold “as is. " It’s up to you to ascertain their value.
Get receipts for all purchases and get a confirmation of delivery date before you pay for the bullion. If purchasing jewelry, retain all receipts in a safe place. If purchasing at an auction, remember to add on a buyer’s premium and any sales tax.
Term of Investment varies. In general, investing in gold futures is like making a short-term prediction of what the price of gold will soon be. However, many savvy investors invest and re-invest in gold futures over a period of years. Nature of investment: High risk. There is high volatility associated with gold futures, and many inexperienced investors have lost money on them. Profile of Investor: Futures are primarily for seasoned investors. Very few novices make money this way.
The commodity trading firm charges a commission for every trade. Each trading unit on the COMEX (Commodity Exchange) is equivalent to 100 troy ounces. Electronic trading on the Chicago Board of Trade (e-CBOT) is another way to trade gold.
When you buy a futures contract for a fraction of the actual cost of the assets involved, you are basically betting on a small change in the price of the assets. You can make a lot of money buying gold futures if the value of gold goes up relative to your currency, but if it goes down, you can lose everything you invested and possibly more (if your futures contracts do not simply get sold to someone else when you do not have enough money down). This is a way to hedge a risk or speculate but not in itself a way to build savings.
Two examples of ETFs are Market Vectors Gold Miners and Market Vectors Junior Gold Miners. The Market Vectors Gold Miners ETF attempts to replicate (before expenses and fees) the yield performance and price of the New York Stock Exchange Arca Gold Miners Index. The portfolio contains gold mining companies of all sizes from around the world. The Market Vectors Junior Gold Miners ETF debuted in 2009. This ETF has become quite popular among investors seeking to have indirect access to gold assets. Although similar to the Gold Miners, the Junior Gold Miners focuses on smaller companies involved in an ongoing search for new sources of gold. Because these companies are less established, there is more risk involved. Term of Investment: Short term. There is a fee assessed each year that deducts from the amount of gold backing your investment, making this an expensive way to invest. Nature of Investment: Medium risk. Because a typical ETF investment can be short- term if you prefer, risk can be minimized.
Note that gold exchange-traded funds do not give you the ability to physically control the gold. Therefore, some gold advocates believe this is an inferior way to own the commodity. [2] X Research source Another disadvantage is that ETFs trade like stocks, and you may have to pay a commission to buy and sell on the exchange. Moreover, any capital gains you realize must be reported for tax purposes.
Gold is always in high demand. It is a tangible product that can always be passed on without concerns for its desirability. Contrast this with antiques and collectibles, which are subject to fluctuations in fashion and style trends. Owning gold can protect you from inflation or currency fluctuations. Countries often invest in gold when economic growth starts to decline. The more debt-laden an economy, the more it may have to pay for gold. Gold can be another “string to your bow” when you seek to diversify your investment portfolio. Diversification is another reason to own gold. This is a cornerstone of sound financial management. Gold is an excellent vehicle for protecting wealth over a long period of time (provided you store it securely). During a period of civil instability, gold is a way to protect assets. It is portable, easy to hide, and can give you something to hang on to when everything else is crumbling.
