Ways to Invest in Gold

Investing in Gold

Due to struggling economies all around the world smart investors are looking for the best options to place their money. One of the most popular investment vehicles over the last 10 years has been gold.

Many people have witnessed substantial gains in their gold holdings and continue to see a nice profit. There are several ways to invest in gold for the beginner and experienced investor.

Unlike stocks and bonds, buying gold is a physical purchase. Once you have bought it you actually own a portion of gold. Here are some of the more common ways to own and invest in gold and their advantages.

What are Gold Sovereigns?

Sovereigns are small coins originally created in 1489 under the orders of Henry VII of England. They were originally made of 23 carat gold. As they became an accepted form of currency they began to be produced in other locations. Melbourne, Sydney, Perth, Bombay, and Ottawa all produced various versions of the coins at different points in time.

Because of their historical importance, the sovereigns are considered some of the most valuable forms of gold coins still available. The British sovereign has a depiction of the Queen’s head. In addition there is a dragon and horse pictured on the coin.

About Krugerrands

The Krugerrand is more populous than the sovereign but it does not have the historical value. Krugerrands were first made by the South African Mint Company in 1967. They are one ounce in size and can be found at a number of locations since they have not been available for very long.

Since the krugerrand has a uniform one ounce size it is quite simple to compare different coins and their relative price. The famous leader of South Africa, Paul Kruger, is featured on the coin, hence the name.

Investing in Gold Bars

It would seem that having pure gold in the shape of a bar would be the best way to invest in gold. However, the one ounce gold bars have not shown any significant price differences in comparison to the krugerrand. Furthermore, a bar does not have any history behind it like the sovereign. Therefore the sovereign may increase in value at a faster rate.

Finally, gold specific dealers are the most likely places to purchase gold bars and these types of businesses are not as plentiful. On the contrary many dealers exist that purchase and sell collector gold coins. In addition there is a worldwide market of private coin investors that frequently buy and sell coins to other investors.

Exchange Traded Fund

Using an Exchange Traded Fund (ETF) is very similar to buying stock. The EFT is a portfolio that represents a collection of different gold holdings. In this manner, investors track the price of gold and buy on the low side and conversely sell on the high side.

Buying gold has been reported as a sound investment for many years. When the overall economic climate is withering most people like to have their money placed in a spot that they know will not only hold its value but increase as time marches on.