Investing in gold stocks, ETFs, or mutual funds is often the best way to expose yourself to gold in your portfolio. To buy gold stocks or funds, you will need a brokerage account, which you can open with an online broker (here is a step-by-step guide to opening a brokerage account). Since the beginning of recorded history, gold has been a universal symbol of wealth. Because of its beauty and scarcity, ancient civilizations coveted the precious metal as a manifestation of status and power.
The ornaments, jewels and the first forms of money were made with gold. Several countries are minting uncirculated gold coins. Although they are all legal tender, they have a merger value that far exceeds their nominal value. Many numismatic (collectible) coins have market values that are even higher.
Collectors are attracted by the potential for increased values, depending on the rarity and demand of the coins they buy. Liberty coins minted before 1933 were the only coins produced in the seven United States mints that were in operation at the time. Minting of these coins ceased that year; in response to gold grabbing during the Great Depression, President Franklin Roosevelt signed an executive order asking for gold held by Americans, exempting only coins of recognized numismatic value. Gold is often combined with other gemstones and precious metals to improve the overall value and appearance of jewelry.
The pieces are often passed on to the next generation as family heirlooms, adding sentimental value beyond that of the piece itself. Jewelry is not the best option if it is strictly an investment, because the price will generally far exceed the merger value. This is due to the labor involved and the retail profit margin. Always determine the purity of gold before buying jewelry, so you don't pay 18 carats when you only buy a 14 karat piece.
Jewelry is covered by most homeowners insurance policies, which is an advantage if your jewelry is lost or stolen, although you might consider buying a jewelry float as an addition to your coverage. Gold is available from private traders, online merchants, jewelry stores, coin stores, private mints, vending machines and government mints. It is best to buy from a reliable source to make sure you are buying exactly what is represented. Increased demand and limited supply contribute to higher prices.
However, with the exception of some industrial uses, such as electronic components, most gold sales are driven by jewelry production and investment demand. For most people, gold should be considered as a way to achieve portfolio diversification and balance the risk of investing in stocks and other currency-based investments. Another simple principle is that buying in bulk is practically always cheaper. Most dealers offer a lower premium per ounce (or any unit of weight you measure) when you buy a certain amount of ingots at one time.
By buying Good Delivery gold on the professional market you save at least 7% of the cost of small coins or bars. And when you sell, you will also get the best price, because Good Delivery gold is the only gold that you can easily sell in the professional markets of the world, where the selling prices are the highest. You can buy physical gold from retailers such as JM Bullion and APMEX, as well as from pawnshops and jewelry shops. Gold ETFs focus on owning physical gold or shares of gold mining companies, creating different risk profiles.
ETF Focused on Holding Physical Gold Bullion Offers Investors Direct Exposure to Gold Price. They tend to match the movement of gold prices relatively well. However, ETFs have a cost in the form of an ETF expense ratio. However, the cost may be worth it, as gold ETFs are usually the easiest way to invest in gold.
Heavy bars are best suited for large investors because they can be efficiently stored in a secured facility that specializes in precious metals. .