If you need to know a little more about how to invest in gold and not fail in the attempt , you should finish reading this article. Experts on the subject know that investing in gold is a safe bet because its value never depreciates, with the only drawback being the need to keep the gold in banks or secure it in safes.
Furthermore, when investing there are many different ways to do so , so the investor finds their own formula along the way to get the most out of gold investments.
Financial institutions, national governments, and high-net-worth investors often prefer to buy physical gold, either in bars or coins, but there is always the inherent risk of theft. A less risky alternative is through certificates of deposit , as these eliminate the need for physical storage. With these methods, investors acquire ownership of the gold they have paid for without having to physically possess it.
The keys to investing in gold are mainly:
- The term
- The storage
- Liquidity
- Purchase prices
With the recent volatility of the economy and the red numbers dominating stock markets worldwide, coupled with fixed income returns at negligible levels, gold acts as an economic safe haven and security during times of change.
The price of gold has risen by about 15% since the beginning of the year and has surpassed the incredible level of $1.200 an ounce.
For experienced investors, it is not only a traditional option par excellence to protect their capital; but it also serves as a very useful mechanism for diversifying investments. Now that we are living in a time of great uncertainty, gold is an excellent option because it has no correlation with the price of stocks or bonds.
More than just expectations of appreciation in short periods of time and its strategic value for the financial world, individual investors who dedicate themselves to investing in this sector have a large number of possibilities to choose how to invest in gold.
To choose the best option, the keys to success lie in liquidity, term, storage costs, metal custody, the volume to be purchased, commissions, and buying and selling points.
Purchase of physical gold.
It's the most popular option among individual investors worldwide . Experts recommend physical gold for those buying for the long term. One of the main drawbacks is the cost of the purchase, storage, and protection , but there are specialized companies that can significantly reduce these expenses.
Apmex, Auvesta, and Lingoro are some of the best-known precious metals sellers in the sector, as they allow private investors to create a secure physical gold deposit.
Many of these companies allow you to transfer or sell gold anywhere in the world at any time in amounts starting from one gram, guaranteeing the security of the liquidity of your investment.
These private companies also provide solutions to metal storage problem.
The big gold sellers They have established agreements and treaties with multinationals such as the North American Brinks that offer competitive costs to negotiate specifically.
The Exchange Traded Fund
Or exchange traded funds, they are the other viable option for trading gold.
Through these ETFs, companies use gold as the underlying asset, replicating its price movements. In short, ETFs are the best option for short-term gold investment and for those who prefer to protect their investment when bond and stock prices fall. They guarantee complete transparency and eliminate the need to invest in and manage the purchase, storage, and safekeeping of physical gold. Some of the most well-known companies offering this type of investment are ZKB Gold and SPDR Gold Shares.
Investment funds
Although its correlation with the current price of gold is somewhat high, it is far removed from the levels of risk involved in physically buying gold. These products are designed to invest in companies engaged in gold mining, so their performance also depends on external factors, such as the location of the mines where extraction is planned or the quality of management. Therefore, it is a more speculative option, but one with potentially high returns.
Certificates and warrants
For more advanced and experienced investors, there are certificates and warrants. These certificates are products traded on the stock exchange that replicate the price of a commodity. On the Madrid Stock Exchange, for example, a Société Générale product is traded that is always referenced to the troy ounce of gold, the international unit for setting the price of gold in the market. On the other hand, there are warrants, which allow trading with leverage.
Tips for buying gold
The most important thing when buying gold is to ensure its purity is good, considering that 999 is the highest, and, if it is an ingot, that it has a brand recognized worldwide, such as S empsaJoyerÃa PlaterÃa , the only Spanish reference that has the international certificate for the sale of gold ingots.
It is also extremely important to obtain the invoice, as it is not only legally required but also the only way to verify the metal's origin. Furthermore, if the metal is ingots, it is highly recommended that they include a certificate from the manufacturing company indicating the weight, fineness, brand, identification number, and date of manufacture.
Regarding weight, it should also always be considered that the larger the quantity, the less you usually pay per gram of gold , so it is highly recommended to buy ingots of 100, 500 or 1.000 grams.
Buying Coins
As a starting point, coins acquire their total value by adding two values : the value of the metal they contain, whether gold or silver, and their numismatic value. High-quality or historically significant coins have a high percentage of numismatic value, making them a less suitable option for a novice investor; these are generally acquired by collectors or experts in the field.
To successfully complete the purchase, you must contact specialist sellers . On the one hand, these transactions are usually expensive, as the minting of the coin is generally also charged. And it's very easy for an unethical seller, of which there are many in this business, to sell coins with a reduced amount of gold without the buyer even noticing.
Because of this situation, it is important for the buyer to be aware that the Troy ounce is equivalent to 31,10 grams of fine gold and to pay the seller for the gold that the coin contains, not for its gross weight.
The safest option when investing in gold coins is the South African Krugerrand , which weighs 33 grams and contains 31,10 grams of fine gold, making it an investment with little risk of loss.
Other recommended coins, both for their purity and their market value, would be the Chinese Panda, the American Eagle, the Canadian Maple Leaf, the Australian Lunar Calendar, the Mexican Centenario, the Austrian Philharmonic, or the English Britannia, since they are valued at similar prices to gold and are made by the mints of the respective countries of coinage, thus ensuring their authenticity.
Future gold
One of the advantages gold offers for future economic growth is that the spread between its buying and selling price is very small. The price at which we can buy gold is only slightly higher than the price at which we can sell it. The smaller this difference, the better the opportunity to buy or sell the gold you have acquired.
This tool is used by short-term traders. It is complicated to master and you have to be very aware of the dates of the exercises, the expiration dates and spontaneous changes in the exchange currency.
Investment funds that invest in shares of mining companies:
This is believed to be the best option for an individual investor looking to enter the gold business, due to the low initial investment required. However, it's crucial to know when to enter and exit the market. It's not a simple investment because these types of companies tend to have short lifespans and experience high volatility in their performance and stock price.
These types of funds are riskier than a conventional investment fund that invests in the IBEX 35 or the Eurostoxx 50 , for example. It's also important to consider that these funds carry the risk of currency volatility, which we can use to our advantage or against us.