How to Invest in Gold

Investing in gold is not as easy as, say, investing and trading in stocks, bonds, and currencies.

This is mainly because stocks, bonds, and currencies are much more accessible to the average trader and other market participants. They have big markets, numerous brokers, an electronic communications network, and other factors that make trading them significantly easier. For gold and other commodities such as oil and other precious metals, it’s a different story. For one, they trade in more complex methods through futures and options. Another is that the market for them isn’t as big or as popular as stocks and currencies. What’s more is that activity in these investments make it relatively slower in generating profit.

Despite this, it is one of the most stable market assets out there simply because it’s gold. It’s a safe haven assets that traders turn to when the volatility in other markets are too much. People seek to invest in gold because they want to store value.

That’s why investing in it proves to be a solid move for traders. There are basically three ways to invest in gold.

1) Physical Asset

Traders can actually acquire gold in its physical form from dealers. These are called bullions. Some banks also sell gold. Once you have it, it’s just a matter of waiting to sell it once the prices go up.

2) ETF

Thankfully, with the advent of technology, investing in gold has become that much easier. Traders can opt to trade commodities on exchange traded funds. ETFs give traders direct exposure by replicating the movement of underlying commodities such as gold and oil. Each ETF share is equal to an ounce of gold.

3) Futures and Options

Traders have the option to access the gold market through the commodity market. They can trade in futures or options.

Investing in gold is as easy as any other kind of investments as long as you also invest your time to learn and experience the trades themselves.