The 3 Best Ways to Invest in Gold

According to Morningstar, gold has been one of the precious metals that have performed the best during the volatile market of 2020, climbing about 17% in just two quarters. But when it comes to data on previous gold investments, this is not the only incident that leaves you in awe. After all, gold has been used as money from the early times until the modern era.

And, indeed there are a lot of ways how you can be able toinvest in gold. Let’s run through each of them.

1. Physical Asset

The pleasure of having to see and touch it is one of the gratifying ways why people invest in physical gold in the first place. Physical Assets come in different ways – Gold Bullion, Gold coins, and Gold Jewelry. 

Gold Bullion

It is the one we see most specially introduced in the movies – stacked up gold bars locked in a vault. Gold bullion comes in bars of gold, which is the most emotionally satisfying way to own gold. A bullion gold bar’s size ranges from a quarter-ounce wafer to a 400-ounce brick. Markings are also seen in gold bars as it is a must for them to be certified for weight and purity. They must be certified for weight and purity and will have to have a serial number attached for security reasons. 

Buyers of gold rely on the commodity’s price rising or what others call gold’s spot price so you can get a fair deal at your trusted dealer, a collector, or even at a pawnshop. 

Given that the price of gold is currently about $1,700 per ounce, this type of investment is somewhat expensive(as of September 2022). Selecting a trustworthy dealer and paying for delivery with insurance is essential for safeguarding the investment. They should also be allowed to keep this in a safe or a bank vault.

Gold Coins

Novice investors chose this type of investment. If you are new to investing and have only recently heard of investing ingold coins, you can confuse this with numismatic coins, which are a collection of coins (coins, tokens, and medals). Purchasing gold coins is best for new issues that are valued according to their gold content. The American Gold Eagle, Canadian Gold Maple Leaf, and South African Krugerrand are popular choices for buyers of bullion coins. 

The price you have to pay for the collector value rather than just the coin is frequently one of the disadvantages of gold coins. Another factor is that, like other real gold, it might be stolen from you, so it's advisable to insure them and store them safely, which could be in a safe deposit box at the bank or your home.

Gold Jewelry

It is for those who wish to wear and casually show their investments. The most pleasing outcome forgold jewelry investors is this. A further benefit of buying gold jewelry is if it is with priceless stones like rubies, sapphires, anddiamonds. It is the icing on the cake and adds value to the item of jewelry you are keeping. Some people frequently treat these as family heirlooms; therefore, the sentimental value also increases their worth.

When purchasing gold jewelry, one thing to remember is to insure each piece when the jewelry is lost or stolen. Nowadays, most homeowner insurance policies include coverage for jewelry, which is a benefit. When purchasing jewelry, here are a few more considerations. For example, ensure the seller is reliable and the item's legitimate. The purity of your gold is another factor. Since 24k gold cannot be used to make jewelry, it would be eliminated from gold jewelry. Your best bet for your jewelry would be 18k, 14k, or 10k that you can get inGold Presidents, so give them a visit to see your options. Take note, the lower the gold purity, the more it decreases your piece’s melt value.

However, some people may not be interested in this investment because physical gold must be stored and insured, which is its biggest drawback. Additionally, a piece's retail price will typically be far higher than its breakdown value. Customers are not only charged for the item price but also the jeweler's skill and the retailer's markup, making this a pricey investment.

2.Exchange-Traded Fund (ETF) and Mutual Funds

The exchange-traded fund (ETF) is known to be gold’s long-term stability. They are accounts that purchase gold on an investor’s behalf. Each of the shares that make up these funds signify a fixed amount of gold and can be bought and sold like stocks. 

It provides more liquidity than actual gold because one of its advantages is that it is easily convertible into cash at the current market rate. If the market is open, you can trade funds for the prevailing price at home.  Investors can conveniently manage their investments through ETFs and mutual funds without dealing with ownership and insurance issues that come with choosing actual gold. Because of this, the majority believe that this is the best strategy for investing in gold.

3. Purchasing Stock in Gold Miners

It is best for those who don’t have the means to get their hands on any gold. You can always look for gold stocks instead. Although you have to take note that they are pretty different from how people invest in physical gold. They don’t rely on the height of gold bullion prices but on the operating performance and how the company deploys its capital and generates profits. So make sure you don’t get lazy on your research on good mining companies to invest in because it will be worth your time in the end.

And those are the top 3 ways how you can invest in gold. There are a few other ways to look into it, but these three clearly show how investing in gold creates a safe place, especially when inflation and other calamities strike. Every investment carries risk, but where would you be without them, right?