For thousands of years Gold has been used as currency and been a highly prized precious metal. Gold has always been a favored investment to hedge one’s portfolio against inflation. Gold prices in the international gold market can remain fairly stable through times of instability, recession and currency fluctuations.
The ways of investing in gold can be via purchasing physical gold bullion in the form of gold bars or minted gold coins. Gold shares in mining companies are also available and various types of gold funds managed by professional investors.
Holding at least a small percentage of your stock portfolio in gold bullion is always a great idea. The relatively stable price of gold can help insure your investment portfolio against economic instability. Gold bullion prices may fluctuate over time but gold investments are highly unlikely to get devalued and have performed well over recent years. Gold prices even stand a chance to rapidly outperform in an uncertain times of geopolitical tension and conflict.
Gold coins have a legal tender face value in the countries currency that they were minted, and can be easier to dispose of if you need to liquidate your gold assets. Many types of gold bullion rounds or gold coins are available, such as American Eagles, Krugerrands, Sovereigns, Canadian Maples, Australian Gold Nuggets, Chinese Gold Pandas and many more. Gold bullion bars are available in many different sizes up to 400 ounce size. The 400 oz bullion gold bar is the London Good Delivery bar size. Good delivery bars must meet certain specifications, they must weigh between 350oz – 430oz and be of a minimum purity of 99.5% pure Gold. These London Good Delivery bullion bars are normally held by central banks and not usually held by smaller private investors.
Mining shares can be lucrative but their performance relies on the success of the companies mine’s and the fundamental structure of the company you are investing in. Therefore mining stocks may not always follow the general trend of the gold market, but can outperform the market if the mining company is successful in its operations.
A precious metal managed fund can provide a more diverse gold stock portfolio. The funds manger will invest in various precious metals and gold miner shares allocating the risk between a selection of companies. Precious metals ETFs and mutual funds are the best way to do so.
The most cost effective way to invest in physical gold is to buy larger bullion bars. Gold bullion in bar form offers the lowest gold dealer percentage over the gold spot price. Depending on the bars size the dealers premium over fix can be as low as 2% – 5%. Compared to the premium on various gold coins of between 7% – 20%. Gold bullion bars can be more attractive financially. It is important to note, gold bullion coins are more liquid than gold bars. Gold coins can be disposed of on the open market fairly easily and quickly in comparison to large gold bars. Coins are also much easier for the smaller investor or private individual to obtain and to store. There is also the collectable and historical value that gold coins have against gold bullion bars.