Guide to Investing in Gold




Another month, another statement showing your savings aren't earning much interest. Maybe it's time you thought about investing your money in something solid?When recessions hit, the one reliable asset has always been gold - and in recent months, it's outperformed almost every other form of investment.But if you want to jump on the golden bandwagon, where do you start and how safe is it? Why invest in gold?It's not just pirates who want to get their hands on gold coins these days. As stocks and property prices plummet, demand for the precious metal has rocketed.The price of gold has been on the up since 2001, spiking at more than $1000 an ounce in March 2008. At the time of publishing, the gold price was $925.15 per ounce (£610.86)*.The price of gold has been on the up for several years. In 2001, the gold price went as low as $255 per ounce. But the price spiked at more than $1000 an ounce in March 2008. At the time of writing, the gold price was $925.15 per ounce (£610.86)*.Gold has been the traditional bell weather for investors over the centuries, particularly in times of economic stress. As governments around the world are spending more to prop up their economies, many people worry about inflation and whether the pound or the dollar will keep their value. If you can't rely on paper money, the logic goes, rely on metal.It's also relatively easy to buy and sell and has a high unit value, which means a small amount is worth a lot! But it's definitely not a short-term investment and remember, valuations can go down as well as up!Six ways to invest in gold1. Gold barsIf you've ever fancied getting your mitts on a real gold bar, this could be the one for you. You can buy them in kilos or troy-ounce bars, the traditional measurement for gold. Both depend on that day's gold price. You pay a small mark up for buying small amounts. At the time of writing, a troy-ounce bar (weighing just over 31g) would cost you around $925.15 per ounce (£610.86)*.2. KrugerrandsSouth Africa is the world's largest gold exporter, producing the popular Krugerrand gold coins. The smallest measure is a 0.1 ounce coin (just over 3g). Expect to pay around 7% above the day's gold price for the privilege of owning the coin (this can be negotiated down if buying in bulk). 3. SovereignsThese 22-carat coins, minted by the British government, are perhaps the most popular for British investors. Those dating from 1887 to 1982 are the best investments at the moment. Their face value is only £1, but they cost more than £100!4. CertificatesIf you don't want the hassle of looking after your gold, get a certificate instead. The Perth Mint, established in 1899, is one of the largest gold refiners in the world, where they fabricate bars and coins that are .999 pure. Perth Mint Certificates are guaranteed by the government of Western Australia and easy to sell. You simply sign the back and send it to the broker.5. Exchange Traded Funds (ETFs)Another easy way to invest in gold, ETFs were first released in 2003. You can buy a share in ETFs from a stockbroker, which represents around a 10th of an ounce of gold that's held in a bank vault.6. Gold SharesYou can buy individual shares in companies that trade in, or mine, gold. However, share prices of the companies could lose value, so they're riskier than solid gold.You can buy individual shares in companies that trade in, or mine, gold. However, share prices of the companies obviously move with their success or failure in their operations, so they're riskier than solid gold.If all that seems too complicated remember there's always good old savings accounts and ISAs to boost the interest you earn.*For up-to-the-minute gold prices, log on to the World Gold Council.--Find out more about investing in gold at http://www.confused.com/savingsSource: http://www.articletrader.com
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