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Rick Shin - September 03, 2021

What Is the Best Way to Invest In Gold?

What is the best way to invest in Gold?

Since last year the price of gold has risen above 24.2% in value. Investing in gold is now a great low-risk way to increase the value of your portfolio.

There are various methods of investing in gold and building your contribution. This short but informative guide will show you the best way to invest in gold.

Benefits of Investing in Gold

Gold has recently hit an all-time eleven-year high, the currency is trading at a price just above $1,900 an ounce. Some people theorize that this is concerning the endless printing of money.

But, others say that it's foreshadowing the weakening power of the US dollar. Regardless of the cost, Gold is beginning to increase in value at a rapid rate. It's wise to research the various methods of investing in gold before building your investments.

Investor Crate Gold and Platinum Crate

A Gold and Platinum Subscription Crate from InvestorCrate.com.

How To Invest in Gold

First, there is the physical possession of gold. This is known as the actual physical method of attaining gold which means buying Physical Bullion. This refers to the metallic form or state. This will take the form of a bar or coin if you are purchasing from a reputable source. This can range anywhere from a smaller portion, such as a quarter of an ounce, to full bricks weighing in at four hundred ounces. Sometimes these coins are heavier than they appear.

But, in obvious terms, bricks are far more valuable and can amount to up to $770,000 in price. So, with that said, there are far more effective and affordable options for investing in gold. These prices are about 1-15% above the spot price.

On average, it can be around 2-8% over the spot price, but with the printing of endless money, the population is becoming more distrusting of fiat currency. With that said, there is a higher demand for precious metals and materials.

Gold Quality and Spot Value

There are many benefits to investing in gold. You can find many local and online places that show you where to invest in gold.

Since the price increase, local dealers, whether it's through a mortar-and-brick store or an online broker are charging closer to 11% over the spot. The market term spot price refers to the percentage added to the overall price value in ounces.

You should also buy gold in quality. The most popular forms of gold are direct from mints or highly reputable sources. You should only consider choosing from investment-grade gold.

Ideal investment-grade gold reaches a 99.5% purity ratio or higher. Some sellers require their gold to have a 99.9% purity status or higher.

But, perhaps the most popular way to invest in gold is through the form of coins. This is great because it's a palpable way to invest and can have easy restoration or storage. It's also easier to distribute as it is an easy divisible option.

Austrian 1 oz Gold Philharmonic Coins

1 oz Gold Philharmonic Coin minted in Vienna and authorized by the Austrian Government.

Gold ETF and Funds

These options trade in a similar fashion to mutual funds and normal ETFs. Also, this can be similar to stock trades as well. The term professionals use in the industry is known as "Paper Gold".

These gold buys are split into three different categories of ETFs and funds. The first type refers to investment in a company or an intermediary. These companies invest in the physical form of Bullion as well.

So, you can pour your money into physical Bullion. Once you purchase these options, they can imitate the spot price. The second method refers to investing in mutual funds or ETFs.

These are set as future gold contracts, but these companies do not possess the physical form of the gold. Instead of holding onto the Bullion, they bet on the rising price of gold.

Certain mining companies can also mine the gold in place of the physical possession of gold. These are built up as ETFs that allow you to invest in a company that specializes in gold mining.

Gold and Silver Coins
Gold Coins from Australia
Gold Rounds MPM

Various Gold and Silver Bullion Coins and Rounds.

Gold Mining Stocks

Gold miners are a term that markets use to refer to gold mining stocks. If you invest in these stocks, you can invest in the companies that mine and collect at various gold mining stations.

These companies do not tie to the exact spot price of gold at all times. Companies need to increase their revenue and show a profit, so their methods of approach require production & maintenance fees. Managing the resources and equipment may take away from the final value of the stock price.

In addition, if the spot price of gold continues to increase at a rapid rate, does not mean it will equate to the current spot price. Digital applications that allow public market trading can also allow you to invest in gold companies. Applications like Robinhood and TD Ameritrade can allow you to purchase gold stocks and store their value in your portfolio.

Gold Futures or Options

This is a trickier way to dive into gold trading through stock options. But, this option is geared towards traders with more experience in the trade. It is wise to invest in gold through options if you pursue stock trading as a full-time career.

If you have extensive experience in trading, the mutual fund, and ETFs connect to these stock options. If you decide to invest in this form of an ETF options, in this case, refer to obligations to buy or sell assets at a certain price at a given time. Digital applications like TD Ameritrade and other programs can allow you to invest in options trading.

Again, these are risky trades and require an understanding of the movement of the market. You can execute a trade that entails a certain price and mark it for a future trade.

You can incur losses on these trades if they rise or fall in value depending on your bet. You can anticipate whether the price of gold will rise or fall and place a bet on these movements for financial returns.

Know the Best Way to Invest in Gold

The best investment research is to see gold's historical performance. Since the 1990s, gold seems to be increasing in value. But, the metric ton mining of gold is increasing as well.

These are but a few methods of investing, all ways can be legitimate financial investments. But, in addition, a financial advisor can help you find the best way to invest in gold if you acquire supplemental income.

Follow our blog for more information on investing in gold and accruing wealth for your financial portfolio!

1 comment

  • Ken WillieJan 01, 2022

    Some financial people say the best way to make money with gold is through the stocks of the gold mining companies.

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