Silver Gold Bull
- Invest in gold, silver, platinum and copper
- Choose from bars, coins, jewelry or collectibles
- Free storage for first 3 months
Gold is a relatively stable investment that doesn’t experience the same degree of volatility as stocks and other tradable assets. If you are looking to hedge against large drops in the market, you may want to consider investing in gold as a way to protect your wealth. Here’s what you need to know and how to start investing in gold.
You can invest in gold in two different ways:
Buying and storing physical gold allows you to get your hands on a tangible asset and avoid the risks associated with the stock market. You can buy gold bullion in the form of gold bars or in coins:
At most institutions, there is a limit to how much gold you can purchase daily. For instance, most banks have a daily limit of around $10,000 worth of gold, but this can vary. Whether you are a customer may also influence your daily purchase limit and even purchase price.
Retirement-minded investors may consider gold IRAs for their bullion investing. These types of self-directed IRAs let you invest in physical gold and other precious metals through a tax-advantaged retirement account.
Gold bars generally range in size from 1/10oz (ounces) to 1kg, but bars of up to 500oz are available. Remember that precious metals use troy ounces and that one troy ounce equals 31.1 grams.
There are two types of gold bars: cast bars and minted bars. Cast bars are produced by pouring molten gold into an ingot mold, while minted gold bars are manufactured via a minting or stamping process.
Cast bars are cheaper to produce, but minted bars look better and are generally easier to sell.
Mints around the world also produce gold bullion coins. Typically smaller than bars and ingots, they’re generally considered to be a more convenient option for many investors.
Not only are they cheaper to buy, but they also make it easier to liquidate a small portion of your investment when you need cash. Coins contain between 1/20oz and 1oz of pure gold. A 1/20oz coin with cost you less than $200, making it a more cost-effective way to gain exposure.
These coins also have a nominal monetary value and can be accepted as legal tender in the country where they’re made – examples include the Australian Kangaroo, the American Gold Eagle, the Canadian Maple Leaf and the UK’s Gold Sovereign.
Gold bullion refers to gold that is at least 99.5% pure and has been transformed into bars or ingots or minted into coins. Gold bullion is the form in which gold is traded on commodities markets worldwide.
Silver Gold Bull
Goldco
Investors who don’t want to take delivery of physical gold or pay to store it in a third-party vault may decide to buy shares in gold stocks or ETFs. Gold stocks and ETFs typically comprise the following:
Meanwhile, gold futures let investors speculate on the future price of gold. In general, futures are exchange-traded contracts that obligate a buyer to purchase and receive a predetermined amount of the underlying asset at a future price and date. While companies can use gold futures to lock in gold prices on an expected future purchase or sale, investors may trade gold futures as a way to speculate on the future price of gold without taking physical delivery of the asset. Examples of brokers that offer futures trading include TD Ameritrade, Interactive Brokers and tastytrade.
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The graph below tracks the spot price of gold, which is the current marketplace price per ounce of gold.
There are numerous pricing factors to consider and compare before selecting your gold.
Here are some of the top gold stocks and ETFs for 2023. Information is accurate as of July 2023.
Colorado-based Newmont is the world’s largest gold mining company based on production and market cap and the only gold producer included in the S&P 500 index. The company operates mines in North America, South America, Australia and Africa and holds reserves of over 96 million gold ounces as of the end of 2022. Most recently, Newmont’s Coffee Gold Project — a proposed open-pit and heap leaching gold development project located in west-central Yukon — was approved by Canadian federal and territorial governments. The proposed mine will be capable of producing roughly 67 million tons of ore over the project’s lifecycle, according to the CBC.
*Compiled using data from Yahoo Finance
Franco-Nevada is a leading gold-focused royalty and streaming company. In the third quarter of 2022, precious metal revenue accounted for 76.8% of the company’s revenue, of which 62.3% was from gold.
Headquartered in Canada, Franco-Nevada provides investors with dividends and exposure to gold price and exploration optionality. The company’s portfolio comprises 419 assets covering roughly 66,000 square kilometers, primarily throughout North America, South America, Africa and Australia. While Franco-Nevada doesn’t perform mining operations, it receives revenue through various agreements. These include: net smelter return royalties, streams, net profit interests, net royalty interests and working interests.
*Compiled using data from Yahoo Finance
The SPDR Gold Shares ETF is the largest physically backed gold ETF globally, with over $56 billion in assets under management. It aims to track the performance of gold bullion and had over 29.5 million ounces of vaulted gold in its custody as of December 31, 2022. The fund has been operating since 2004.
*Compiled using data from Yahoo Finance
A safe haven investment is typically stable in times of market volatility. A safe haven is also useful for investors looking to diversify their portfolio, decreasing exposure to riskier assets or investments. Investors view gold as a safe haven for several reasons:
If you’re searching for ways to protect your wealth or diversify your investments, gold bullion, stocks and ETFs may be a practical addition to your portfolio. These securities provide a means to add gold exposure to your portfolio, either through physical acquisition or exposure through the stock market. Regardless of how you choose to invest in gold, remember that, like all investments, it carries risk.
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