As a commodity trader and investor in gold, I’m always on the look out for the best gold investment available out there in the market. As you know, gold is probably the best hedge against a falling dollar. The more the dollar drops, the more gold rises top silver stocks.
The fact that spot gold price has been breaking new highs and the US dollars breaking new lows is a testimonial that the “gold standard” is still much relevant today despite the prevalent use of fiat currencies around the world. When the central banks are flooding the market with cheap money, people always turn to the tangible value of gold as the basis for real value.
If you want to protect your wealth, it’s time you start doing some gold investment. In fact, there are quite a few gold investment opportunities that can potentially give you good returns and I’ll cover them here. There are basically 6 ways you can invest in gold and they are:
1. Own physical gold. In terms of pure value, nothing can beat ownership of pure gold like gold coins and bullions. The most traditional method of such precious metals investing involves buying gold coins that have been produced in government mints. These coins are legal tender and are often more expensive than other types of gold, but are sold at a low premium. Popular minted gold coins that are worth buying include one-ounce South African Krugerrands, Canadian Maple Leafs or the American Eagle gold coins.
2. Gold Exchange Traded Funds (ETFs). This is a relative new and interesting way to invest in gold. An ETF is a single gold index or stock that is backed by gold bullion holdings and is considered a moderate risk investment. There are 2 ETF that trade in the United Status that hold gold bullion as their only asset. They are the StreetTRACKS Gold Trust (symbol GLD) and the iShares COMEX Gold Trust (symbol IAU). ETF is a practical way to hold gold as part of your investment portfolio.
3. Gold Mutual Funds offer a wide range of mining stocks. This type of gold investment is usually for people who don’t want to own physical gold but still want to do some precious metals investing. It provide an investor the opportunity to limit or expand their risk easily. If you want to do gold investment through mutual funds, it’s better to select those funds that hold stocks in more established, well-capitalized company such as Newmont. Such “senior gold stocks” have been around for several years and usually have profitable track records as compared to fairly young companies.
4. Junior gold stocks. If you are more adventurous and has more risk appetite, you may consider this. Junior stocks are less likely to own their own production mines. They are typically in the exploration stage for gold and therefore have a great risk of loss. Compared to senior gold stocks, they may have less capital. Since most of these companies hedge on their future production, the return on these shares can be volatile and are considered high risk.
5. Gold futures. This is only for more sophisticated and experienced investor. They are one of the least expensive ways to purchase gold, but is considered higher risk. This may be the most complex of all gold investment but it is one that potentially big fortunes could be made. Having said that,the futures market is far too complex for the vast majority of investors.
6. Spot gold trading requires the least capital to begin trading and you can trade gold online. If you buy 100 troy ounces of gold coins or bullion, it’ll cost you around $120,000. However,you will only need $1,200 in a margin account to begin online gold trading.