It’s been reported that about 12% of Americans own gold in some capacity.
We often look at gold as a pure and rare commodity that signifies wealth. Surprisingly enough, you can invest in different kinds of gold to turn a decent profit.
But how do you invest in gold? And what types of investments should you make?
That’s what we’re here to answer today. In this article, we’ll be outlining key considerations to help you decide which different types of gold investments are right for you.
Price of Gold
Before you start investing in gold, it’s important to understand how gold is priced.
Gold price is not fixed. In fact, it changes every day. It’s determined by a series of transactions that are supervised by either the London Bullion Market Association or the COMEX in New York.
Those two dealers have a big impact on the overall price. So how do you keep track of these prices?
The “spot price” of gold is constantly being updated is generally the current value of gold. A daily price guide is also released by the LBMA, which a lot of gold dealers use to price their products.
While it’s a little complicated, keeping your eye on these prices is key for getting the best value on your investment.
Four Different Types of Gold Investments
So which type of gold investment should you sink your teeth into? You might go to the stock market, visit your jeweler, or you might even buy it online. Let’s take a look at some different types of investments.
Jewelry is bought both for containing gold as well as for its historical and aesthetic significance.
Because of these reasons, gold jewelry tends to increase in value and price. So whether gold jewelry is a good investment depends on its current price.
While there’s no retail markup for gold jewelry, it could take time to find the right price. If you’re a jeweler, you should think about investing in these products.
Bullion and Coin
People tend to think of gold bullion as large gold bars stored in bank vaults. Bullion actually refers to any form of pure hold certified by its weight and purity.
While gold bullion looks impressive, they’re sometimes hard to sell or buy. If you own $10,000 worth of gold bullion, you can’t sell 25% of it since you can’t just hack off a piece.
Coins, on the other hand, offers more liquidity and are more common, so it might be worth looking at those instead.
Gold Mining Stocks
Purchasing gold mining stocks means you’re buying a share of a gold mining company. This means share prices won’t directly correlate with the price of gold.
It’s more reliant on how well the company is doing, the economic and environmental risk of the company, and a few other factors. It’s considered a safer method of gold investment, but a lot of research is needed before selecting a company.
Gold ETFs, or exchange-traded funds, are products that track the price of gold and can be traded at the stock market. Not all of them are backed by gold and each one is set up differently.
ETFs and similar mutual funds are great as low investments and ease of ownership. Therefore, ETFs are perfect for the casual fold investor.
Leverage Gold Investments Today
The good market is a vast one, but there’s plenty of opportunities to make the right investment and profit. Use this article to find the right option among the different types of gold investments.
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