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3 Best Ways to Invest in Gold

by Olufisayo
Best Ways to Invest in Gold

Perhaps you are looking forward to diversifying your investment portfolio. Maybe you are searching for a safe haven that can hold when other markets are down. Well, one of the options you can count on to achieve the two objectives is gold, but how do you go about it? Keep reading to learn more about the three main strategies you can use to invest in gold.

Buy Gold Now: Why More Investors are Interested

Like other commodities on the market today, such as oil and wheat, the price of gold is determined by the forces of supply and demand. Today, the bulk of gold available on the market comes from hard rock mining. But it can also be produced as a by-product of copper mining.

The largest producers of gold are China, Russia, and Australia, while the jewelry industry, followed by aerospace, medicine, dentistry, and electronics, are the main consumers. For individual investors, the idea of buying gold works well instead of holding a large reserve of cash. Here are other reasons why investors buy gold:

  • Gold is an excellent hedge against economic and price volatility on the market.
  • It is a good form of independent investment.
  • An excellent way to save your money for the future.
  • The investment does not require maintenance.

How to Buy Gold: Top Three Methods

Now that you know the main benefits of buying gold, here are three main methods that you can use:

  • Buy Physical Gold

You can get exposure to gold by purchasing jewelry, bullions, and coins. If you opt to purchase bullions, they can be an excellent choice because they trade close to the market price of gold. Note that bullions do not have artistic value, meaning they trade differently from numismatic coins and jewelry. Make sure to work with the best dealers, such as GoldAvenue, when buying physical gold for assurance of high quality.

Another important thing that you need to think about before you can buy gold is how you will store it. If you opt to store it at home, make sure to install a strong and secure safe. You might also want to consider commercial storage options, such as bank deposit boxes. Consider checking some of the top safe options on the market or ask your gold dealer for suggestions.

  • Buy Gold Futures 

Futures are contracts that are traded on exchanges, such as New York Stock Exchange. They allow the holder to purchase and sell the contract at a specific time in the future and at a predetermined price. To trade gold futures, you need to have an account with a selected broker. Furthermore, you need to deposit an initial margin that forms the lowest amount required for opening a position. Whenever your account balance drops below the required margin for maintaining it, you will be required to top it up.

  • Purchase Shares of Gold Mining Firms 

If you do not want to buy gold directly, such as through bullions and coins, it is still possible to invest through shares of companies that mine gold. These firms carry an operating risk that can break the correlation between supply and demand on the market. For example, the price of a gold company’s shares can trade lower than the actual price of gold depending on its management and government policies.

As you can see, there are multiple ways of investing in gold, and you should carefully think about your objective for buying gold before selecting the preferred one. If you want to optimize the returns from your investment, it will also be a good idea to follow the latest market trends. More importantly, ensure to work with the best dealer on the market.

Photo by Michael Steinberg from Pexels

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