Since the economy’s beginning, gold was considered one of the most suitable materials to serve as currency within society. This fact was due to its rarity and beauty since jewelry made with gold also symbolized status within the culture where it was worn.
All these characteristics made gold a symbol of wealth and a good investment. Today, there are many reasons to invest in gold, but in general, they remain the same: to increase our wealth, to avoid currency devaluation, to protect our money from inflation, and to generate luxury among our assets.
Investing in gold is one of the best ways to obtain profits in the long run and, at the same time, recover them safely since it is a precious metal with multiple uses in the industry and, at the same time, a lot of liquidity. But investing in this material is not a blind process, and we must use specific methods to ensure success.
That is why in this article, we will proceed to show you the seven best ways in which you can invest in gold so that you can safeguard your capital and obtain profits in the future.
Buying physical gold: the oldest method
Obtaining physical gold is the oldest way of buying gold and is still used in some situations today. After all, it has several advantages not offered by any of the modern methods that have emerged.
Having physical gold on hand allows us to make direct deals with it and sell it quickly if necessary. It also allows us to deal with people with smaller pieces of gold, allowing small investors to buy gold.
There are three ways to buy physical gold:
1. Gold bullions
As its name says, it is about buying gold bars that have been previously purified and melted to take a specific shape. These bars have different weights, but they usually range from 100 grams in the case of small sellers up to 12.4kg in the case of banking institutions.
Many people will be willing to trade their gold bars, and we can buy them as long as we pay the right price for their weight. This method, however, almost always assures us of gold with a good percentage of purification, and usually, the sellers are reliable institutions.
On the other hand, buying bullion implies that we will have to invest in its storage since security is necessary to avoid theft or loss of the bullion.
2. Gold coins
In many cultures, gold was used as currency at some point in their history. Today, these coins can still be found and are valuable for their material and their rarity.
Many gold buyers seek to purchase such coins for their gold value and then access collectors’ markets willing to pay much more for them because of their historical significance.
The value of jewelry is usually subjective depending on the brand or the jeweler; however, it always has a value corresponding to its materials.
Gold jewelry allows us to obtain small pieces adaptable to small buyers; however, gold jewelry has alloys, so we must be aware of this when buying it.
Non-physical gold investment methods: the most used in the new era
Since working with physical gold involves paying for security to protect it and transportation from trading it, many investors are looking for alternative methods to invest in this precious metal.
Non-physical methods require a little more patience and have a little less liquidity than physical methods, but they save us large amounts in the processes involved in owning physical gold.
There are several non-physical gold investment methods, but here are the most important ones to take into account:
4. Gold investment funds
An investment fund is a portfolio managed by a professional broker composed of shares of some category. In this case, a gold investment fund is composed of different claims related to gold.
Investing in gold using this method requires going to a broker and making purchases. After starting to be part of this investment fund, our profits will depend on the movement of the price of gold in the market.
Finally, it is necessary to research the subject and find a reliable broker, which is unsuitable for everyone.
5. Contracts for the difference in gold
Contracts for difference are basis contracts that allow us to trade an asset as if we had it in our hands and generate profit by taking into account the difference between the price at which we buy it and the price at which we are going to sell it.
These contracts are comfortable to trade; however, their liquidity is slightly lower than physical gold. The truth is that it is a direct method of gold trading that allows us to save transportation and security.
6. Shares of gold mining companies
If you are more versed in the world of stocks than gold, investing in shares of companies that deal in gold is an excellent way to earn income both passively and when you sell them.
Gold mining shares are usually linked to the price of the final product, so if gold goes up, so will the shares.
7. Investing in the stock market
Unlike investment funds, here, we can buy shares directly from companies whose work is linked to gold. These companies usually revalue every time the price of gold rises, so their shares are a perfect way to make our investment safely and reliably.
To do this, we will need a trustworthy broker to perform the processes for us. Besides that, we must also be aware of the commissions these brokers charge for any procedure to check how much we are gonna get.
Which of these methods is the best?
There is no infallible method to invest in gold; on the contrary, they all have advantages and disadvantages. It is recommended that we take a look at each one, and once we have experimented, we choose the most suitable investment style.