All that glistens may not be gold, but there are plenty of ways to invest in the precious metal without touching so much as a flake.
Buying gold as bullion, coins, jewellery or bars is just one way of investing, according to The World Gold Council.
“Investors who want to put some money into gold need to think about the opportunities that are available in their market,” said a spokesman.
“Not all options are available everywhere and in most cases, professional advice should be taken about the risks and returns.”
Different ways to invest in gold
Typical investments in goal are:
- Bars and coins
Buying gold coins and bars to hold personally or to store in a vault is the traditional way to purchase the precious metal in quantity. Typical investments would be –
Coins
Collector coins
Gold bullion bars
- Exchange-traded funds (ETFs)
ETFs are financial contracts that are backed by an amount of gold bullion matching the value of the issued ETFS. These financial products are stock exchange listed and can be traded as shares
- Gold accounts
Gold accounts are managed by dealers who store bullion in a vault. They are generally termed:
Allocated gold accounts
Unallocated gold accounts
Gold accumulation plans
- Other gold-linked products
These are investments in gold that do not involve any direct ownership of the metal, but are financial contracts closely linked to the price or supply of gold – typical investments would be:
Stocks and shares in gold mining companies
Investments in gold futures and options
Different ways of holding gold are designed to match different risk profiles and financial goals of investors.
Strictly controlled gold market
Traditionally, gold is held as a metal in times of financial difficulty because the price of gold is generally uncoupled from currency exchange rate fluctuations and supply is strictly controlled to meet demand.
As a result, investors always have a market if they need to sell quickly, which can be a real problem with many other investments.
“Some investors are more sophisticated than others, so feel more comfortable taking risks with more speculative products,” said the spokesman.
“A typical gold investment strategy will consider short, medium and long term goals and will typically be part of a 60:40 portfolio.”
For more about investing in gold, where to buy and the latest prices, go to the World Gold Council web site.
