How to Invest in Gold

Investing in real gold than gold bullion and gold coins

Today's economy is prompting increasing numbers to invest in hard assets as a means of security during uncertain times. Investing in gold carries some risk, but during downturns in the economic climate, it provides a measure of safety not found in many other investments.

Types of Gold Investments

Although many investors prefer holding physical gold, there are other methods available. Owning shares in a gold mining company or investing in precious metals mutual funds are two ways to enter the gold market without holding physical gold. A gold certificate is an investment option that states the owner of the certificate owns a specified amount of gold. This article will concentrate on investing in physical gold, as many see this as the safest method.

Owning Physical Gold

Historically, gold bars have been the most common variety of investment gold. This is the form that governments and banking institutions hold. The bar's value is based on the current price of gold, and the premium paid is generally lower than that on gold coins. Gold bars come in a range of weights and are priced accordingly. One risk with gold bars is the ease with which larger bars can be counterfeited.

Bullion coins are a popular choice for investing in gold. These include the Canadian Gold Maple Leaf, the American Gold Eagle, the South African Krugerrand and the Chinese Gold Panda. The coins are available in one-ounce and fractional weights. Be aware that smaller coins generally carry a higher premium. In addition to the value of the gold contained in the coins, some have an additional value based on the demand for certain dates of issue.

Some historic gold currency is also bought and sold as bullion. Coins that were extremely common and have little to no numismatic value sell for their gold value and a small premium when demand is low. Examples of such coins are the British Sovereign, the French Franc and the Swiss Franc. Some investors prefer these coins. They believe demand will increase and supply will diminish as many of the coins are being melted down.

Where to Purchase Investment Gold

Become familiar with precious metals pricing. –Spot price” is the current value of gold, and it determines the cost of the gold you purchase.

As investing in gold becomes more widespread, the number of dealers correspondingly increases. Pick a reputable dealer with a strong history in precious metals. Beware of counterfeits, and always compare the premiums charged by different dealers.

Bullion coins are a popular choice for investing in gold