In contrast to the traditional notion of “cash is king,” some individuals are seeking a more secure repository for their earnings, leading them to consider gold. Gold has maintained its status as a favored investment for millennia, being both malleable and enduring. Notably, The Wall Street Journal highlighted a recent surge in gold prices by 8.2% this year, following the Federal Reserve’s recent announcement. To embark on your gold investment journey, here’s a resource to get you started.
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You have several choices: You can opt to purchase physical gold such as bars or coins, invest in stocks of gold mining companies or a gold exchange-traded fund (ETF), or participate in gold futures.
Invest in Gold Stocks
Investing in gold without physical ownership is possible through purchasing shares of gold mining companies listed on the stock market. This approach offers a safeguard against sudden drops in gold prices, as these companies can shift focus to other metals. However, owning mining stocks carries the drawback of potential decline along with the broader market, regardless of gold’s stability, due to factors like company finances, management quality, and long-term production outlook. Accessing commodity stocks is simplified through various investment apps, with some even offering a free stock upon signup.
Invest in Gold ETFs
Investors often choose gold exchange-traded funds (ETFs) as a way to mitigate the uncertainties linked to investing in individual companies. These funds amalgamate capital from multiple investors and allocate it across diverse gold and mining companies. Notable gold ETFs like GLD, GDX, and GDXJ are traded like stocks and provide an accessible investment avenue.
Purchase Physical Gold
The most direct route to invest in gold involves purchasing physical forms like bars, coins, or jewelry. To generate a profit from this precious metal, a reasonable expectation of selling it at a higher price than the purchase is necessary; however, predicting gold prices is challenging. The past few decades have seen significant fluctuations, with prices rising from around $300 in the 1990s to over $1,900 in 2011, only to fall back to $1,300 in 2013, experiencing another surge to $2,000 in 2020 during pandemic-induced uncertainty.
For those incorporating gold into their retirement strategy, a Gold Individual Retirement Account (IRA) is an option. Setting up this IRA with a specialized custodian or broker is essential, although be prepared for potential fees covering metal storage costs.
