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Various Ways to Invest in Gold

Updated on July 3, 2011
know how you can save your money with various options of gold investment
know how you can save your money with various options of gold investment

It is out of the question that gold is one of the best choices for those that want to invest some of their money. One reason is often because gold prices tend to increase over time. However, investing in gold may not turn out to be as simple as it sounds. As a matter of fact, there are quite a few options that people will have to choose if they really want to invest some of their money in the commodity of gold.

To get things started, the first way people can invest their money in gold is with direct ownership. It seems that this is the ultimate choice for those planning to buy gold. By owning gold bars, they won’t have to worry about the price being influenced by the government. The only things that will affect how gold price fluctuates are the demand and supply of the commodity. Nonetheless, people can’t expect a fast profit by purchasing gold bars. Instead, even though they will have to buy in retail, they will have to sell their gold bars in wholesale to gain the profits they may have expected. But that should not be too much of a problem. Anyway, gold has a better financial value when it is treated as a defensive rather than a speculative asset.

Investing in the gold mutual funds is the next way people can invest their money in gold. This is usually the best option for those that do not really want to buy the physical gold but still desire the financial value gold can offer.

Junior gold stock investment is the next choice people can choose. However, this one is rather speculative. The reason is because the junior gold stocks are not quite likely to possess their own productive mines. In addition to that, even though it may have the potential to offer higher profits, it also gives the investors a greater loss risk. With that being said, this way of investing in gold is often suitable only to those investors with quite a high risk tolerance level.

Investors can also invest in gold with the gold ETFs (Exchange Traded Funds). In this case, the investors are not about to purchase the gold bars physically. As a matter of fact, they are not going to purchase the gold itself. What they will be purchasing instead is a particular quantity of asset yet this asset is backed by the commodity of gold. This way, the investors won’t have to worry about a gold company going bad in business. They only have to pay attention to the fluctuation of the gold price.

The last way that exists when it comes to investing in gold is to invest in the gold options and futures. Nonetheless, this option is only suitable for those investors out there that have had some experiences in the world of gold investment. This is because they will often have to speculate possible gold prices to show up. In the options market, for example, they will have to speculate how the gold price may move in either direction.


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    • frugalfamily profile image

      Brenda Trott, M.Ed 6 years ago from Houston, TX

      How does one go about buying and selling gold bars? Wouldn't the retail cost involved in buying and selling gold bars be prohibitive? Are their minimum purchases involved in buying wholesale?