Investors often turn to gold as a safe haven when economic conditions worsen, or geopolitical tensions rise. With recent spikes in inflation and the stock market trading lower than its all-time highs, some are seeking an asset with a history of gains, that is, gold.
Now gold appeals to investors for many reasons, and it offers qualities that make it an excellent alternative to traditional investments such as stocks and bonds. Despite not generating cash flow, it is seen as a store of value. Some view it as a hedge against inflation due to the Fed’s attempts to stimulate the economy (such as keeping interest rates close to zero) and government spending leading to higher inflation. It is considered one of the most widely known assets of value in the world as it transcends cultures. It has been used for currency, electronic components, and jewelry throughout history. Today, gold’s unique qualities entice investors looking for an alternative to stocks and bonds.
Amidst the tumultuous times of the COVID-19 pandemic, gold has served as a safe haven asset – its value rising to unprecedented heights in August 2020, breaching the US$2,000 mark for the first time. This surge in price was seen from a mere US$1,485 in 2019. The limited availability of gold compared to other commodities makes it an attractive investment option – offering those who own it an effective way to preserve their purchasing power against rising costs of goods and low-interest rates.
The beauty of investing in gold is that you don’t need large amounts of capital, nor do you have to own the precious metal itself; there are various ways to gain exposure to gold without having to physically purchase it.
Let’s get started and keep reading. Let us help you uncover all the possibilities that investing in gold can offer and how you can make the most out of it.
Gold Bullion
Gold bullion is the most popular form of investing in gold, ranging from small grams to hefty 400-ounce bars – currently valued at approximately $1,900 per ounce. This makes investing in gold bullion quite an expensive endeavor. And unlike stocks, there’s no way to get a fractional share of a bar. The cost of gold bullion is high, making it all the more vital to invest wisely.
To ensure your gold is safe, pay for delivery with insurance or invest in secure storage at a vault or in a safe deposit box. Research the current gold spot price to ensure you are paying a fair rate when purchasing your bullion. There are many ways to buy gold bullion, from online dealers and local collectors to pawn shops.
Pawn shops can give you a reasonable amount and deals. If you visit any nearby pawn stores, you will see they have a huge variety of gold, especially bullion. Certain pawn shops specialize in that, so look up to them. Opt for bullion from reputable pawn shops for the most value for your money, as you may end up paying extra for the gold collector value at local shops. With the proper research and planning, you can feel confident about investing in gold bullion.
The scourge of risk surrounds any gold enthusiast, a double-edged sword that can be both a blessing and a curse. On the one hand, the precious metal could be stolen right out from under your nose if you don’t take the necessary precautions to protect your holdings. On the other, what’s the use of having all that gold if you can’t get its total market value when you need to sell? Even coins, generally seen as a solid investment, could mean a massive loss in value if you urgently need cash. So, keep those risks in mind when investing in gold bullion.
Gold Futures
Are you looking for an exciting way to invest in gold?
Then trading futures or options contracts is the wildest ride available. These derivatives are based on the price of an underlying asset, and they could even yield the physical delivery of gold. But that’s not why investors flock to them. Futures contracts are exciting agreements to buy or sell a security for a set price on a specific date, no matter what the market does. Options contracts add even more thrill, offering the chance to buy or sell if the security reaches a certain price before a specific date. Dare to take your gold investing strategy off-road and try out futures and options contracts today!
To jump into the world of options and futures, you need an account at an online brokerage specializing in these securities. But be sure to read all the fine print – these derivatives come with a hefty dose of risk, so you’ll need to sign additional forms. Once your account is set up and ready for trading, you can get started right away. Most platforms charge a commission for every trade you make, so it’s essential to know how many contracts you’re buying or selling – because the more you do, the more it’ll cost.
Investing in gold through options and futures contracts can be risky, but it requires active monitoring and an understanding of the inherent leverage. You may have the opportunity to make a hefty sum quickly, but that same leverage can cut both ways and lead to substantial losses if the market moves against you. As such, it’s essential to remain aware of your holdings so you can close out or exercise your options before they become worthless.
On the other hand, the benefit of investing in gold via futures is that you have the potential to control large amounts of gold with just a tiny amount of capital. But this also presents risks for those who need to manage their positions properly or anticipate market movements; it’s easy to become overextended and lose your investment just as quickly.
Gold Coins
Gleaming gold coins, like the American Gold Eagle or Canadian Maple Leaf, are highly sought-after collectibles. Although you’ll likely pay more than you would for an equivalent amount of bullion, these coins generally contain a lower concentration of pure gold. A one-ounce American Eagle coin is only 91.67% gold; the remaining weight is comprised of silver and copper.
When searching for the perfect gold coins to add to your collection, it’s essential to be confident in your purchase. Whether you buy in-person or online, make sure you’re not being duped by counterfeit pieces or misled about the purity of your investment. Pawnshops are your go-to place if you prefer to buy them in the purchase. Shocked, right? But this is the truth. Pawnshops are experts in these areas and have been in this business for centuries. There are numerous pawnshops in Brockton, and all the states of America, where they specialize in gold, jewelry and coins and are highly reputable.
We understand that holding a gold coin in your hand is like having a glimpse into the past, as these coins come in an array of shapes and sizes that span centuries. Be aware that you may be paying more for design elements such as engravings or collector value, but the most common coins weigh one or two ounces, with half-ounce and quarter-ounce coins also available. From the South African Krugerrands to Canadian Maple Leafs and American Gold Eagles, you can find collectible coins everywhere – even blanks, damaged or worn coins at any reputable pawn shops.
Although their prices may not always match their gold content, some coins are so in demand that they trade at a premium. For instance, a one-ounce American Gold Eagle coin will cost you just over $2,000 in mid-September 2020 – almost 5% more than its weight in gold bullion. If you’re looking for better deals on gold coins, you can try local collectors or pawn shops; just make sure to purchase through a reputable
Gold Jewelry
If you’re looking for more ways, such as a luxurious way to invest in gold, you can’t go wrong with antique jewelry. But be prepared to pay a hefty premium – anywhere from 20-300% more than the actual gold content. Plus, not all that glitters is gold – many pieces are made with alloys that combine gold with other metals to enhance color and durability.
To ensure you get your money’s worth, make sure the seller is reputable and that you have enough documentation to attest to its quality when you decide to resell. To save you time, we highly recommend paying a visit to any pawn shop near you, as they always provide proof of the authenticity of the piece and are always open to reselling it as well. Investing in gold jewelry can be an exciting experience – just make sure you know what you’re buying. It also offers a unique opportunity to wear or even resell pieces that have been previously owned. However, it comes with a variety of risks.
Additionally, the cost of the jewelry may include a markup based on who designed and manufactured it – ranging from 20% up to three times the value of the raw gold. Lastly, one should be aware of the purity of the gold, which is calculated in karats – 24 karats being 100% pure. The lower purity could decrease your jewelry’s melt value if it were melted down into pure gold.
Factors to Consider While Purchasing Any Type of Physical Gold
If you have made up your mind and decided to invest in gold in any one of the abovementioned ways, now let us give you a couple of tips and a few things in mind:
Book secure storage
When investing in physical gold, secure storage is essential. While you can certainly keep your precious metal at home, a custodian may act as the ideal guardian for your investment. Be sure to take time for research before selecting a place of safekeeping; however, remember that this added security comes with an additional cost!
Make sure to get insurance
If you’re investing in gold, the last thing you want is to find it all gone after theft or natural disasters. Ensure that your precious assets are protected by considering an insurance policy – whether it be through homeowners/renters’ insurance if stored at home or with a storage provider for added security. Do not overlook this critical step when investing in gold!
Big names matter a lot
Investing in gold? Make sure you get the most bang for your buck by buying from trusted sources like Credit Suisse, Perth Mint, and Royal Canadian Mint. As well-respected producers of fine gold products since 1856 (Credit Suisse), 1899 (Perth Mint) and 1908 (Royal Canadian mint), their name is synonymous with quality that has appreciated over time!
Always check for purity level
When pursuing gold as an investment, select pieces that boast a purity level of at least 91%. With these higher ratings come more excellent stability and longevity – making them sound investments. Whether it be coins, bars or jewelry items you buy, look to their precious metal content for the ultimate assurance of value.
Finally, let’s end this note on the frequently most asked question by most investors, and that is.
Is Gold Really a Good Investment?
Unfortunately, if you’re seeking the next big gold rush, it’s too late to join in. Over the past five years, gold had seen an impressive 36% price increase due partly to its perceived role as a safe haven against market downturns, such as during 2007-2008 when stock markets plunged 33%, while gold only dropped 2%. However, prices can be volatile, so investment diversification is recommended if you allocate some of your funds toward this glittery option. For best results with balancing risk and reward – keep any investments in shiny yellow metal small!
All in all:
Investing in gold can be a personal choice, but some of the abovementioned ways are the best possible ways to invest in them. Again, do your research first, check out the market and rates, and then decide. For a more precise decision, make sure to follow our guide and recommendations of paying a visit to any nearby pawn shops as well.
There is no harm in checking out these places too. We guarantee you that you’ll be shocked to discover how they are running the business so efficiently and how good they are, especially when it comes to gold, jewelry, coins, and bullion. We guarantee you that you’d run to pawnshops for all your purchases after that.
