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Throughout history, few investments have rivaled gold in popularity as a hedge against almost any kind of trouble, from inflation, to economic upheaval or currency fluctuations, to war.
When you think about investing in gold, don’t restrict yourself to just buying physical gold, like coins or bullion. Alternatives to invest in gold include buying shares of gold mining companies or gold exchange-traded funds (ETFs). You can also invest in gold by trading options and futures contracts.
Investing in physical gold can be challenging for investors more accustomed to trading stocks and bonds online. When it comes to physical gold, you’ll generally be interacting with dealers outside of traditional brokerages, and you’ll likely need to pay for storage and obtain insurance for your investment. The three main options to invest in physical gold are bullion, coins and jewelry.
When most people think about investing in gold, bullion is what they think of—big, shiny gold bars locked away in a vault.
Gold bullion comes in bars ranging from a few grams to 400 ounces, but it’s most commonly available as one- and 10-ounce bars. Given that the current gold price is around $1,900 per ounce (as of September 2020), this makes investing in gold bullion an expensive proposition. And unlike stocks, there’s really no way to get a fractional share of a gold bar.
Due to gold bullion’s high price, it’s especially important to use a reputable dealer and to pay for delivery—with insurance—or to shell out for storage at a large vault or in a safe deposit box.
If you choose to invest in gold with bullion, it’s also a good idea to stay up to date on the price of gold, so you can pick the right time to buy—most dealers update their prices based on current spot prices.
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The most common gold coins weigh one or two ounces, though half-ounce and quarter-ounce coins are also available. Collectible coins, such as South African Krugerrands, Canadian Maple Leafs and American Gold Eagles, are the most widely available type of gold coins. Some dealers even sell blanks and damaged or worn coins.
Gold coin prices may not entirely align with their gold content, though. In-demand collectable coins frequently trade at a premium. A one-ounce American Gold Eagle coin, for example, retails for just over $2,000 in mid-September 2020. That’s almost a 5% markup over a comparable amount of gold bullion.
You may be able to find better deals on gold coins from local collectors or pawn shops, but it’s still typically safer to make purchases using a reputable, licensed dealer.
You may also opt to buy gold you can wear—or that someone once wore but has been damaged—in the form of gold jewelry. Investing in gold jewelry, however, carries many risks that investing in pure gold doesn’t.
First, you have to be careful about jewelry purchases as not all secondhand jewelry is sold by reputable dealers. Not only does authenticity matter to you—but it will also matter to anyone you try to resell the piece to. This makes it crucial you buy investment jewelry from a reputable dealer and obtain as much documentation as possible.
Second, you’ll pay some amount of markup based on which company designed and manufactured the jewelry. This could be anywhere from 20% to more than three times the precious metal’s raw value.
You’ll also want to be aware of your jewelry’s purity, or what percentage gold it is. Gold purity is calculated based on karats, with 24 karats being 100% gold. Lower purity decreases your piece’s melt value, or the raw value of your jewelry’s components if it were melted into pure gold.
User GCAP723822
recently invested $82.540
1 hour ago
Verified by Blockchain Explorer