With financial chaos prevailing around, people are in constant search for new investment options which could hedge them against inflation. Investing money on shares can be risky because you never know when share market crashes down whereas for fixed assets like land, liquidation is a major concern. So with shares and property ruled out, investment in gold is considered to be safe because it has been used as a form of currency for centuries and it is accepted worldwide.
With the price hovering to $1000 for an ounce of gold, majority of the investors are showing interest in procuring gold. Gold proves to be a good investment option, especially when it is difficult to predict what happens next? And when the next crisis is going to hit?
With that being said, let us look at different ways of purchasing gold. Gold can be purchased in different forms like gold coins, gold bars, gold mining stocks, mutual funds and exchange-traded funds. Traditionally, gold is purchased physically in the form of coins and bars for investment purpose. Again gold coins are of two types; Bullion and collector. Bullion coins are the normal gold coins without any historical significance and their price depends on the cost of gold on that particular day in the market. Whereas collector coins carry historical significance with it, hence their price will depend on its rarity and significance.
Bullion coins are sold at small premium amount over the actual gold price because they are minted by the respective governments which in turn guarantee the content of gold present in the coin. In general, Bullion coins are bought by the investors if they are planning for an investment whereas collector coins are bought by those people who want to add them to their collection. Internet has shrunk the world virtually, so anyone from anywhere can buy gold coins from online stores just with few clicks. However, if you are making an online purchase, make sure that you opt for a genuine and reputed store so as to avoid any discrepancies.
Gold bars can be a good option for gold dealers or large investors. Purchase of gold bars differs from that of gold coins and the purchaser does not get any discounts even if it is bought in bulk which is a major drawback in buying bars. Another drawback is that selling bars is not as easy as selling coins.
A mutual fund is another good option for investing in gold. In mutual funds, the investor can invest in gold alone or opt for diversified mutual funds in which the investor can choose to invest on other precious metals including but not limited to silver and platinum.
Gold exchange e-traded fund or gold ETF is similar to that mutual funds and the only difference is that the former pools the investors and use the funds for purchasing gold. However, one should be very careful while opting for gold e-trades.