Few investments can rival the popularity of gold, and it’s usually used as a hedge against inflation. In terms of currency fluctuations, war, economic upheaval, inflation, or any kind of trouble, investors tend to go with precious metals as safe havens where they can park their money,
When you think about investing in gold, you might not want to limit yourself to buying physical coins, bullion, or jewelry. There are other alternatives like exchange-traded funds and shares from mining companies that you can take advantage of. Other things to invest in may include futures contracts and trading options.
Investing in physical bars may be challenging for investors who are so used to bonds and stocks trading. When it comes to buying metals, you may need to interact with dealers that are into gold and silver, and they might be different from the traditional brokerages out there. You can find many companies that do this including the one in this link https://investingingold.com/lexi-capital-review/ and make sure to check their services and offerings. You have three options to consider when investing in gold including the following:
Many people think that when it comes to bullion, they need to obtain a shiny bar that’s generally locked up inside the vaults. On the contrary, some bars may range from 400 ounces to a few bars but what you’ll commonly get are 10-ounce ones. Given that the price is about $1796 as of October 2021, this will make investing in bullion very expensive. Unlike some stocks, you won’t be able to get fractional shares.
Since the prices are higher, it’s essential to call a reputable dealer to deliver the bullion to you. Make sure they have insurance and get a safe deposit box to store the gold. You can also opt to store these in a large vault for a safer option.
If you choose to invest in bullion, you should be up-to-date with the prices. This way, you’ll be able to pick the best time to buy. Many dealers will update the price based on the current spot value of the gold, and you should stay tuned with these.
You can get quarter-ounce coins and half-ounce ones. However, the best ones weigh about two ounces. The collectibles include the American Gold Eagles, Canadian Maple Leaf, and South African Krugerrand, which are widely available in the world. Many dealers may even sell you worn, damaged, or blank coins, but it’s up to you to know their value.
The prices for the coins may not always align with their gold contents. The rare collectibles and in-demand ones may fetch a premium, and an ounce of an American Gold Eagle Coins is currently at $1798 to $1866 as of October 2021. The retail prices may be as high as $2,000, depending on the dealer. Fortunately, though, you’ll always find the coins from pawn shops, local collectors, and private dealers. However, it’s still best if you could make purchases from licensed and reputable dealers so that you can be sure of the quality you’re getting.
Buying gold that you can wear is pretty common today. Some may get damaged jewelry that someone once owned because they are generally more affordable. However, there are risks when you choose jewelry that is not present when you choose pure gold.
First of all, you need to be careful with the purchases, especially if they are going to be second-hand ones. Deal only with reputable dealers that have an international client-based. You need to make sure that the necklace that you’re buying is authentic, and you should be able to fetch a higher resale price if you decide to sell it to others in the future. Obtain documentation about the legitimacy of the jewelry and consult a pawn shop worker if you’re unsure of what you’re buying.
Know that you’ll have to pay for some amount on mark-up prices, and this will usually depend on the company that manufactured and designed the jewelry. The price could be from 20% to 4x the raw value of the metal.
Be aware of the jewelry’s purity and the gold’s percentage on it. The purity is often based on karats, and the 24K ones are pure gold. A lower purity will decrease the overall melt value as well as the raw value of the jewelry.
Stocks from Miners
Investing in companies related to mining is another option for you. They have stocks that can increase or decrease based on mining, refining, and trading precious metals. This is an easier proposition, especially if you don’t have a place to store the gold. Many popular stocks may include the ones that have mining operations in Africa, North America, and South America.
The shares of the stocks from the gold companies will be based on the current expenses and profitability of the said company. What this will mean for you is that you’ll be carrying similar risks as when you’re investing in any other kind of stock. A single stock may experience a specific volatility level, and they don’t necessarily provide you with the security that’s similar to a diversified fund.
Investing in Mutual Funds and ETFs
There are also mutual funds and ETFs available that will help you get the exposure that you need when it comes to gold. They offer more liquidity and diversification than the other forms. Some may be passively managed index funds that will track some trends in the industry, or they may come in the form of options and futures.
Some of these exchange-traded funds may hold deposit receipts and physical gold and they track the current price of the bullion. Others have a passively managed fund that will track the baskets of stocks in refining and gold mining companies. You can also connect with actively managed funds from professional investors. They can beat the returns that you can get with the index funds, but they may charge a higher expense ratio compared to others.