7 Ways to Make a Gold Investment

7 Ways to Make a Gold Investment

There are many options available to people interested in gold investing. Investments can be made by purchasing and storing physical gold, purchasing items that represent the ownership of gold or buying stocks.

7 Ways to Make a Gold Investment #1 – Gold Coins

The governments of several different countries issue gold bullion coins as legal tender. The price of gold coins is determined by their fineness, or the ratio of actual gold content to other materials in the coin. Supply and demand can also affect the price. Common coins include the American Gold Eagle, Canadian Gold Maple Leaf, South African Krugerrand, Australian Gold Nugget, Austrian Philharmoniker, Chinese Gold Panda, British Sovereign and French Coq Gaulois.

7 Ways to Make a Gold Investment #2 – Gold Bars

Gold bars are the most traditional form of gold investment, and they are sought after by many central banks throughout the world. Bars are available to investors in a variety of sizes such as one kilogram, ten ounces, one ounce, ten grams and 100 grams. One of the most popular gold bars is the London Good Delivery bar, which weighs 400 troy ounces. In general, bars have lower price premiums than gold coins, but investors should be always wary of fakes. Bars should always be purchased with a certification.

7 Ways to Make a Gold Investment #3 – ETFs

Exchange traded funds, or ETFs, are traded similarly to shares at the major stock exchanges. For gold ETFs, the American Stock Exchange is the foremost trading venue. ETF funds purchase large amounts of gold and hold it in storage. They then issue shares that correspond to the price of a bullion. If prices raise by 5%, then individual ETFs would increase by the same 5% as well. ETFs allow investors to easily trade and to buy in small quantities. ETFs may require a small storage fee annually.

7 Ways to Make a Gold Investment #4 – Certificates

Certificates represent an ownership of gold without requiring the investor to actually store any bullion. Allocated certificates correlate to the ownership of specific numbered bars that are stored in individual banks. Unallocated gold certificates, however, do not guarantee equal exchanges for bullion if there is a run on the issuing bank’s gold. Certificates have a historical importance in the United States, where they were considered legal tender from 1882 to 1933.

7 Ways to Make a Gold Investment #5 – Accounts

There are five types of accounts: allocated, unallocated, gold pools, electronic currencies and gold accumulation plans. Allocated accounts allow investors to own bars or coins that are stored in a vault, which is managed by a recognized bullion depository or dealer. Unallocated accounts do not represent ownership of specific bars. Gold pool accounts allow people to invest in very small amounts. Electronic currencies allow investors to make online payments by using a currency that is linked to stored gold. Then the accumulation plans are similar to savings accounts in which investors acquire a fixed set amount for every month.

7 Ways to Make a Gold Investment #6 – Derivatives

Derivatives include options, futures and forwards. These financial instruments can be traded at several exchanges throughout the world or through private trading. Gold futures are most often traded at the New York Commodities Exchange and Euronext.liffe in the U.S.

7 Ways to Make a Gold Investment #7 – Mining Companies

Buying shares in a mining company is another investing option. As the price rises, the profits from the mining company would be expected to rise, causing shares in that company to increase in value. There is some market volatility associated with the mining shares, but many companies will hedge the price in advance to reduce this fluctuation.