4 Ways to Own Gold

Gold has long been seen as an asset that provides security.

BullionVault makes buying gold different than most investments by giving outright ownership upon settlement, unlike most others where your claim becomes part of their balance sheet.

Physical gold

Physical gold in the form of coins and bars is increasingly sought out by investors looking for an investment that will maintain their purchasing power over time, regardless of changes to other currencies. Gold can also act as a hedge against inflation or deflation which is why more investors open precious metals IRA accounts with gold IRA company.

Investors can purchase physical gold in various places, including government mints, precious metals dealers and jewelry stores. Investors should avoid collecting coins with higher markups that may not be easily sold later.

Physical gold ownership can be costly due to storage and transaction fees, sales tax in certain jurisdictions and its lack of liquidity compared with stocks or ETFs. Thankfully, several companies now provide vaulted gold which allows investors to diversify internationally while mitigating country risks by using vaulting providers; these investors become legal owners of their gold compared with some ETFs which lack full physical backing - providing a great alternative option for investors who desire gold ownership but do not have time or budget for buying and storing it themselves.

Futures and options

Gold futures and options provide an easy way to speculate on gold prices without owning physical bullion. Like all futures contracts, a gold option contract gives you the right but not obligation to purchase or sell at a certain price in the future; these contracts are traded on CME COMEX (a commodity exchange).

Gold bars or coins may provide emotional satisfaction, but their purchase comes with certain drawbacks. Insurance and storage costs are high, while your profit depends entirely on whether the precious metal's price increases.

By comparison, investing in gold-backed ETFs or mutual funds may offer more of a diversified portfolio. Most of these funds invest both physical gold and shares of precious metal mining companies to lower risk while increasing earning potential compared to purchasing pure bullion directly. It should be remembered, though, that mutual funds and ETFs alone cannot serve as an adequate way to diversify your overall investment portfolio.

Exchange-traded funds (ETFs)

ETFs (exchange-traded funds) are baskets of investments that trade on an exchange every day like stocks and can be used to track an index or market sector, diversify portfolios or meet investment goals.

ETF shares are fractional ownership in a portfolio managed by professional managers, and are transparent enough for investors to see exactly what they own at any point in time. ETFs come in several varieties that track commodity prices, specific investment styles or specific sectors or market indices; others even utilize alternative assets such as real estate or hedge funds as investments.

ETFs offer tax efficiency when compared with mutual funds, typically featuring lower fees than their counterparts and being easily traded whenever the stock market is open for trading. Although ETFs should generally be avoided during their first and last 15 minutes of each trading day as these times tend to have reduced liquidity than other periods during that trading day.

Mutual funds

Mutual and exchange-traded funds (ETFs) remain among the most popular methods for investing in gold, as these vehicles provide more liquid investments than physical gold, but don't provide as much diversification. Furthermore, ETFs tend to have higher fees than other investments.

Futures and options contracts represent one of the riskiest ways of investing in gold, offering investors the right but not obligation to buy or sell an asset at a specific price for an allotted period of time. This type of investment should only be considered by more experienced investors.

Other speculative investments may include equity in mining companies. Although these investments typically track gold's price more closely, they may be more volatile than physical bullion or ETFs. If you're looking to add gold to your portfolio, opening a brokerage account and selecting from among various options available will likely provide the most efficient way forward.

Jewelry

Gold has the unique characteristic of being both value-dense and liquid; meaning it packs a lot of value into a small space, while being easy to sell or trade for cash. Furthermore, unlike silver and platinum which are mostly industrial metals used as investment vehicles during recessions, gold remains its own currency and continues to thrive during economic uncertainty.

Though solid gold is expensive, jewelry often contains less-expensive alloys of this metal. Manufacturers must state on each piece the amount and purity (also referred to as "karat") of the gold used; solid gold itself should not cause allergies but certain alloys may irritate those with metal allergies.

Many jewellery companies have established responsible sourcing standards. Signet, for instance, publicly identifies its diamond suppliers and has implemented a program to promote responsible artisanal and small-scale mining in conflict zones. Furthermore, RJC standards are relied upon for gold procurement while they work toward implementing IRMA standard that certifies mine sites directly rather than only jewelry companies - expected to become available sometime around 2018. The latter standard will offer much greater transparency than RJC by offering certification directly to mine sites rather than only jewelry companies.