Best Way To Invest In Gold – Advices and Tips
Invest in gold and other commodities
Invest in gold
Gold has always been used as a means of payment over the centuries. And today, worried investors still have a preference for this precious metal, especially when they expect economic turbulence or a significant devaluation of their currency.
Gold in principle yields nothing, at least in the form of interest. Gold is generally considered a means of protecting against inflation or when other types of investments may become negative. In the past, it has often happened that the price of gold increases along with the cost of living. But this protection is only a reality in the long term. In the short term, the value of gold can fluctuate considerably.
Best Way To Invest In Gold: How to invest in gold?
There are 4 ways to invest in gold, for different investor profiles:
1-Bullion and gold coins: you can buy physical gold from your bank or through a specialized institution. And keep it safe in a safe. Beware of collector coins: you will usually pay more for them than their gold value;
2-Trackers: these are investment funds whose price corresponds to that of gold. They buy gold when new money is invested in the fund. So you invest indirectly in gold, without having to keep it yourself;
3-Gold mines: you can buy shares of gold mines. When the price of gold rises, the price of your action is likely to do the same. But like any business, a mine can go through difficult times, or even go bankrupt;
4-Derivatives: Gold-Price Derivatives are for experienced investors who are not afraid to take risks. These products can pay big, but you can also lose all your original bet, and even more. Be careful !
Best Way To Invest In Gold: How is the price of gold determined?
Gold is traded 24 hours a day on different global markets. It is traded primarily by telephone or electronically. After each transaction, the price is passed on to data providers such as Reuters or Bloomberg; these constantly publish the price of gold. A price that is constantly evolving. When you buy or sell gold, this is done at the price in effect when you contact your bank or gold dealer. Warning: if you buy, you will pay the seller price, which is slightly higher than the advertised price; if you sell, you will pay the bid price, which is slightly lower than the cash price.
The latter depends on the dealer to whom you buy or sell gold, but also on the quantity traded. For example, you pay for a 1kg gold bullion about 1% more than the advertised price, and for a 50g gold bullion, about 2.5% more. When you sell “old gold” – like rings or other jewelry – the price will be even lower than the cash price: the jewels are not made of pure 24-carat gold, and the cost of redesigning gold is also charged.