How to Invest in Gold? A Guide to the Options to Invest in Gold

Posted on April 30, 2020July 3, 2022 by investinternals

Want to invest in gold, but aren’t sure how?

This is the best article to get answers to the most common questions below:

Why should I invest in gold?
What are the methods available to invest in gold?
What are the options to invest in gold?
What is paper form of gold? and How can I invest in that?
Can I invest in gold online?

Why should invest in gold?

When adding gold to an investment portfolio, it is a step to protect that portfolio from inflation. Gold considering as the best hedge against inflation and recessions. Investment advisors always suggest to add a portion of gold in the portfolio due to the protection power of gold .

Part of gold investment strategy, investors have several options and methods to invest in gold as mentioned below:

How to invest in physical gold?

1. Buy gold jewelry

This is the traditional method to purchase gold. Buying gold jewelries are good idea for daily use as well as accumulation of precious metal in physical form.

In some places, jewelers are offering gold saving schemes for customers through systematic payment of a fixed amount each month.

2. Purchase gold coins and gold bars

This is another physical form of gold. Many banks and jewelers offering gold bars and coins to the customers to purchase. Customers can purchase the gold coin or bars as a single investment. Gold coins can be purchased by 1 gram, 2 gram and more in quantity.

Best idea is to purchase small amount of gold regularly.

3. Gold collectibles

Purchasing gold collectibles is an another way to invest in gold. However, this has dual advantage. As it is gold, the price of gold never get shrink. though, it is a collectible, more value will get added.

4. Public auctions

Many of banks and private financial enterprises conducting gold auctions almost every year. and this is the best option to buy gold in low price comparing with market rates.

5. Gold gifts

It is a good idea to purchase and gift gold coins to the family members for special occasions. This will then added to the gold portfolio for future.

How to invest in virtual gold or paper gold?

1. Gold exchange traded funds (Gold ETFs)

Known as paper gold, Exchange traded gold funds are the best way for investors to invest in gold systematically. Investors can buy gold ETF units direly from the exchange. This is the best method of investing in gold online. Investors required to have a trading account to purchase gold ETF online.

2. Sovereign gold bonds

Sovereign gold bonds are issuing by the government offering best option to invest in gold. Such bonds also a best example for paper gold investing and has guarantee to the invested amount along with transparency.

3. Invest in gold mutual funds

Investing in gold mutual funds is another way to invest in virtual gold. While investing, investors receive the investment receipt as a record for their gold investment. They can redeem the investments whenever they need to do so. This is the form of investing in gold in paper format.

Another advantages of investing in gold mutual funds are, investors can start investing with very less money. Mutual funds have options for investors to invest small amount systematically in each month through Systematic Investment Plan (SIP).

4. Digital gold

There are offerings from the companies for investors to invest in gold digitally. However, a minimum payment amount is required to start the purchasing thereafter can be increased the purchase value upon the terms and conditions.

Advantage of this schemes are, upon reaching a minimum quantity, the physical gold will be delivered to the customer. This investment can be considered as paper to physical. It also update the gold price on daily basis.

5. Commodity exchange

Commodity exchanges offering good option to purchase gold through futures and options. Investors can utilize commodity exchange options to accumulate gold.

However, investors required to have a commodity trading account to invest through them.

Purchase shares of gold companies

Little different from previous ideas, one can purchase shares of gold mining companies. Major advantage is, when the gold price is rising, share prices of the mining companies also rise.

Best Gold Investment Advice for Investors

Gold is an investment instrument which is safe, capable to beat inflation, secure and always liquid. Prices of gold indirectly connected with stock markets. When the stock markets are up, gold prices would come down. When markets are down, gold prices will shoot up. Gold price would move as just opposite to the stock market momentum.

Considering this less known secret, investors must aware that the best time to purchase physical gold, gold funds and ETF is when the stock markets are up or in bull phase!