Gold investments that are worth it
Physical gold remains an important asset to investors simply because it’s a universal currency that is held by central banks around the world. The fact that it’s a finite currency, meaning it can’t be minted forever due to the limited amount of gold that can be mined, makes it rare and tradable for a high price. Gold is also used as hedge against a bad market since it doesn’t move in line with other securities or even property.
Physical gold investments are there to preserve a person’s wealth – a quality that only physical gold can boast of. Gold mining stocks or even gold-backed ETFs can give an investor exposure to the yellow metal but they don’t preserve wealth. Only when you already have gold in your portfolio should you only consider about getting investments like mining or ETFs in order to have a tool to track gold prices with.
Gold bullion or coins
There’s no better way to get exposure in gold than to invest in the physical metal. The best way to own it is by having direct ownership of the metal and access to a vault of your choice. If you can’t afford a bar, there are gold coins that are much cheaper. Coins are denominated differently (1 full ounce, ½, ¼, and even 1/10) and if you can, only buy in quantity. BullionVault says that investors will pay a premium of around 4% when they buy in bulk and usually about 8% when buying smaller amounts.
There are two gold coins that are currently in demand. One is the South African Kruggerands and the other is the American Gold Eagles. South African Krugerrands have much cheaper premiums than the Gold Eagle so if you’re not planning on selling your gold any time soon, you can go for it. On the other hand, Gold Eagles have higher premiums but have a big market for buyers so it’s easier to liquidate than the Krugerrands.
Gold certificates allow investors to have gold investments inside banks. There are two types of gold certificates: those that target allocated accounts, and those that target unallocated accounts. Never buy certificates for an unallocated gold account since they only give you access to buy gold from an unallocated pool of reserves. This means that there’s no guarantee you can exchange your certificates for gold at anytime because banks sometimes liquidate them. Only open an allocated gold account with your bank so that you’ll always have a dedicated amount of gold to liquidate in times of emergency.
Remember, if you can’t hold the gold, you don’t own it. Physical gold investments are the way to go if you want to have something to cover your assets with when the market goes sour.