Gold Investing for Beginners

Gold Investing for Beginners

March 11, 2019

Are you interested in gold investing? Perhaps you’d like to make some money in this market, but you’re unsure where to start. Gold investing can be intimidating to those who aren’t familiar with it.

Use the following gold investing 101 to learn how you can invest with this precious metal. For additional information, contact a local precious metal advisor:

  • Jewelry: This industry makes up approximately 50 percent of the demand for gold. However, investing in gold jewelry isn’t necessarily a good route if you want to achieve a good ROI. While jewelry is fairly easy to acquire, it doesn’t always earn a high resale value. Unless the piece is a collector’s item, it will probably decrease in value after purchase rather than increase. If you decide to consider gold investing with jewelry, keep in mind that 24-karat is pure gold. Jewelry with a gold content of 14k or higher is considered sufficient gold content.
  • Physical gold: This form of gold investing includes collectible coins and bullion. The pros of this type of gold are tangible ownership and direct exposure. On the downside, this form of gold can be difficult to store. It can also be challenging to liquidate if you want to sell it. Lastly, this form of gold investing relies on gold price changes to achieve value increase. If the price of gold goes down, the investment loses value.
  • Gold certificates: If you are interested in gold investing, you may obtain Perth Mint Certificates. These allow you to invest without physically owning or storing gold. This lack of inventory can make this method appealing; however, it is not very liquid. Additionally, the certificates are only as good as the company that backs them, and not many companies use them.
  • Gold mining stocks: For some, investing in stocks can be a good option. This provides an indirect exposure to gold investing. The investment is susceptible to risks with mine operation. It also reflects exposure to other commodities. On the plus side, if the gold stocks do well, the investor can reap the rewards.
  • Gold ETFs: Exchange-traded funds (ETFs) are another option that gives investors direct exposure to gold investing. This is a highly liquid option, so it can be appealing to those who want to be able to cash their investments at any time. On the down side, there are often fees involved, and the investment will only see good return if the price of gold increases.
  • Futures contracts: This allows investors to own gold without physically storing the metal. The buyer and seller agree to a future exchange of gold on a certain date at a specific price. Due to the nature of the price fluctuation and other conditions, this is not a good option for beginning gold investors. If you’re just starting out with gold investing, it’s best to choose a less risky option.

Learn More

To find out more about gold investing, contact the experts at Gold Wealth Financial. Our experienced professionals will teach you about gold investing and the best options for your portfolio. Reach out to us today with any questions.

- by Steve Hunt

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