Investment Methods in Gold

By: Elton John

Apart from storing gold at the safe deposit box in home or at a bank, investors can also place gold in unallocated or allocated storage with a dealer or a bank. In the event of the latter becoming bankrupt, the client can claim the gold to become a general creditor, whereas the gold held in the allocated storage has to be returned to the client in full.

1. Gold Bullion
Purchase of bullion gold bars is the most conventional method of investing in gold. In some nations such as Switzerland, Liechtenstein, Austria and Argentina, dealers can easily sell or purchasethem over the counters of major banks. Instead, there are bullion dealersproviding the same form of service. There are various sizes of gold bars available in the bullion market. Typically, in Europe, these are either available in 12.5 kg bars or 1 kg bars. However, other weight units also exist such as 1oz bar, 10 oz bar and the Tael.

2. Gold Coins
Another popular way of holding gold is by purchasing gold coins as an investment. Usually, the prices of bullion coins depend on the weight, with no or little premium above the price of gold. The most popular bullion gold coins include the Australian Gold Nugget, the American Gold Buffalo, the American Gold Eagle, the Canadian Gold Maple Leaf and the South African Kruggerrand.

3. Gold Certificates
Investment in gold does not mean storing the actual gold bullion. Rather, the gold investors can hold certificate of ownership. The Gold certificate permits the investors to sell and buy the security without any hassles involved in the transfer ofthe actual physical gold. The only government guaranteed gold certificate program that exists in the world is the Perth Mint Certificate Program. It offers the investors the ability to store platinum, silver and gold in an unallocated account without any storage cost.

Gold Accounts: Majority of Swissbanks provide gold accounts, wherein investors can easily sell or purchase gold just as a foreign currency.

4. Exchange-traded Funds
Investorscan trade GETFs or Gold exchange-traded funds as shares on the major World Stock Exchanges including Sydney, New York and London.

ETFs in gold denote simple method of gaining an exposure to the price of gold sans the inconvenience of placing physical bars. Typically, for trading in gold ETFs, authorities charge a small commission along with a small yearly storage fee. By selling a small amount of gold, the annual expenses such as management, insurance and storage fees are balanced. Hence, the amount of gold held in each certificate of gold declines gradually over a period.

In some nations, gold ETFs indicate a method of avoiding the VAT or sales tax that may apply to physicalgold bars and coins. Ease of purchaseScience Articles, sale and liquidity make ETFs a popularmethod of gold investment.

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