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To most people, gold may be synonymous with expensive jewellery and Olympic medals, but to many others, gold is considered a valuable investment. This is especially the case in times of economic uncertainty or volatility, as gold is considered a safe haven asset that may retain its value better than other investments.
But how do you actually invest in gold, and is it really a worthwhile investment?
There are a number of ways you can invest in or buy gold, from physically buying gold bullion or gold coins, to investing in gold-related stocks (such as mining companies), exchange-traded funds (ETFs) or gold derivatives like futures.
The main ways to invest or buy gold are:
This will depend on the type of investment you want to make and your risk tolerance, but investing via a gold-focused exchange-traded fund (ETF) can be a low cost, accessible way to invest in gold. By investing in a gold ETF, you can avoid the cost and hassle of buying and storing physical gold, while still getting full exposure to any potential increases in the price of gold.
However, as with any investment, there are still certain risks associated with buying a gold ETF, and if the price of gold falls, so too will the value of your investment.
Fees apply. Your capital is at risk.
One option is to invest in gold mining firms. You can find many large firms listed on the FTSE 100. Equally the Alternative Investment Market (AIM) can offer access to smaller, newer enterprises. Through investing in mining stocks, you’re directly linking your capital to the success of these companies, and the changing value and price of gold.
While heavily correlated, the performance of gold mining stocks will not perfectly match the price of gold. Unlike the resource itself, companies are subject to a number of external factors such as employees taking strike action, geo-political implications for the area, natural disasters, and business decisions.
Compare brokers to buy gold shares
ETFs are another option worth considering. ETFs give access to a whole load of assets, without having to put all of your money into one or two firms. If you need to brush up on ETFs, check out our guide.
Simply, ETFs allow investors to minimise risk, while taking advantage of the performance and general popularity of a particular sector – in this case gold.
There are loads of gold-based ETFs to select from, covering off a whole host of different companies within the industry. There are mining companies, exploration companies, as well as the actual asset itself. Gold ETFs are a pretty good choice for those who are new to investing, as well as those looking to secure their portfolio.
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ETF | Ticker | Annual cost |
---|---|---|
iShares Physical Gold ETC | SGLN | 0.25% |
Invesco Physical Gold ETC | SGLD | 0.29% |
WisdomTree Physical Gold | PHAU | 0.39% |
Gold Bullion Securities Ltd | GBS | 0.40% |
WisdomTree Physical Swiss Gold | SGBS | 0.19% |
WisdomTree Physical Gold GBP Daily Hedged | GBSP | 0.39% |
WisdomTree Physical Gold GBP | PHGP | 0.39% |
WisdomTree Physical Precious Metals | PHPM | 0.44% |
If the trading platform you use has access to the US stock market and other international markets, you should also be able to invest in a range of foreign gold ETFs.
For some people, part of the appeal of gold is being able to hold it. If you’re one of those people then good news, buying solid gold has never been easier. Traditionally, you can buy gold Bullion via the Royal Mint.
The Royal Mint is the government-owned mint that produced the UK’s coins, and is the best place to buy gold in the UK in terms of accessibility and trustworthiness. Head to The Royal Mint site and you’ll be able to choose from a range of Gold Bars. From 1g up to 1kg, you can buy it online today.
Alternatively, there are plenty of UK based dealerships that will buy and sell gold for competitive prices.
Before you buy physical gold, you should make sure of the following:
If you want to own gold but not store it yourself, many dealers will sell it and then store it on your behalf. Instead of receiving the physical gold, you will receive a gold certificate for the amount you bought. However, these certificates are only as good as the company that issues them, and it may be hard to sell off your gold.
Compare brokers to buy gold shares
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.
All investing should be regarded as longer term. The value of your investments can go up and down, and you may get back less than you invest. Past performance is no guarantee of future results. If you’re not sure which investments are right for you, please seek out a financial adviser. Capital at risk.
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