Ways To Invest In Gold

Written By : NGDlover
Labels : World of Gold, Gold Investment

Notegolddiamond - Honestly, this article is inspired by "Seven Ways To Invest in Gold" from Forbes, then I mix it up with my old article about Choice in physic gold investment.  Currently, in term of investment, there are at least eight types to invest in precious metals called gold. We surely will select the type of it that still in our scope and give the greatest benefit.

1. Gold Coin 

Gold coin are purposely made to be traded as gold deposit. Gold coin are often used as collectibles. frequently, the value for rare coins can be very expensive, far exceeding the value of gold contained in the coin itself. There are many gold coins that circulated in the world.



Although gold coin type is good to serve as an investment tool, but still there are two things that make them less competitive. First, on some countries, its sales still subject to Value Added Tax. Second, the printing costs for a gold coin set for 3-5% of the value of gold itself. Thus, the purchase price of the gold coin is still more expensive when compared with the gold price itself.

2. Gold Bullion Bar / Ingot

Do not imagine the bullion bars of gold bricks for all made of gold as we often see in Hollywood movies. The weight of gold bars range from 1 gram to 1 kg. Usually this gold is pure gold content of 24 carats. For investment purposes, you should choose 24 karat gold purity level of 99.99%.

The term Gold ingot is refer to a type of gold bar which comprised of blocks of gold, in a variety of weights. The main difference between gold ingot and other gold bars is that the ingot is usually cast, rather than stamped, and is often thicker than other gold bars. Gold ingot's purity level is no less than 95% (995). (http://www.postalgold.com/gold-ingot)

The most common gold ingot or gold bar on the international gold market is the London Good Delivery bar, which weighs in at about 12.44kg and can fetch anywhere up to US$120,000 each. These are considered the most secure and the most popular investment in the gold bullion bar market.

Many countries produce and manufacture their own unique gold bars. The difference between all of them are factors such as rarity, security, storage and insurance of the bars, as well as the economical stability of the individual country where the gold ingot is stored or manufactured.

Purchase of gold bars are usually not subject to taxable by the government, because this kind of gold is regarded as a kind of raw material for the jewelry industry and so on. Therefore, for the same weight, the price of gold bullion always cheaper than gold coin.

Thus, gold bullion gold is a type most suitable for use as an investment instrument, because we do not need to spend additional costs to pay tax or the cost of design / manufacturing.

Gold Bars offer a highly efficient way to buy large amounts of gold relative to coins. Often, gold bars are cast at a relative low premium over the intrinsic value of the precious metal. This premium is often around 3% though can be less based on volume. Major gold market traders will deal in gold bars or ingots typically, while smaller investors may favor gold coins. 

3. Excellent Gold Jewelry

Gold jewelry is the most popular and commonly sold in the community. The gold, in the form of jewelry, can be worn everyday as peoples accessories, women have broadest manner of gold jewelry to wear than men. Frequently, a good, high level of art, and rare jewelry have both art value and physical value, and of course influencing the price of the jewelry when it comes to sale or auction.

However, if you just consider the value of physical gold jewelry without  full concern with the art / style of jewelry itself, this ordinary / casual gold jewelry is not recommended to be purchased. This is because when we buy ordinary jewelry, there are additional components that we must pay, that is, the cost of making their own gold jewelry whose value can be quite large. Meanwhile, if the ordinary jewelry was sold again, it commonly just judging from the gold weight alone.

4. Gold ETFs

Buying shares of an exchange-traded fund that tracks the price of gold allows investors to profit from price increases without the high cost and hassle of buying, insuring and storing physical gold.

These shares are traded on the major stock exchanges in the world including Zurich, Mumbai, London, Paris and New York. Gold ETPs are offered in various forms including but not limited, trusts, certificates, notes and funds.

There are pros and cons about these formats, since some of them is backed by physical gold while others are not, however, the total amount of gold traded by this way as of October 2009 was 1,750 tonnes of gold in total for private and institutional investors.  
(http://www.kitco.com/reports/Goldessential_oct062009.pdf)

5.Gold Derivatives

Derivatives are securities whose value depends on the values of other basic underlying securities. They include such well known instruments as futures and options which are actively traded on numerous exchanges and as well numerous over-the-counter instruments such as interest rate swaps, forward contracts in foreign exchange and interest rates, and various commodity and equity derivatives.

Gold derivatives are Futures Contracts that allow investors to bet on gold prices by agreeing to buy or sell a set amount of gold on a specific future date . With options, investors pay for the right to buy or sell gold at a set price in the future but are not obligated to do so if it proves unprofitable.

An educational and helpful article about gold derivative can be read in http://www.usagold.com/gildedopinion/howederivatives.html
also here is an article about how huge the derivative industry is
http://www.gold-eagle.com/editorials_02/chapmand061302.html

6. Gold Accounts

This involves paying a custodian to assign a share of gold they own to you and to store it in their vault. There are some type of this gold accounts  : (http://www.invest.gold.org/sites/en/how_to_invest/gold_accounts/)

Allocated Account : Simply like keeping gold in a safety deposit box, this is the most secure form of investment in physical gold. Allocated mean that actual bars are assigned to you.

Specific bars (or coins, where appropriate), which are numbered and identified by hallmark, weight and fineness, are allocated to each particular investor, who pays the custodian/trust dealer for storage and insurance. The holder of gold in an allocated account has full ownership of the gold in the account, and the bullion dealer or depository that owns the vault where the gold is stored may not trade, lease or lend the bars except on the specific instructions of the account holder.

Unallocated account : your investment is backed up the vault's contents but no individual bullion is assigned to you. Investors do not have specific bars allotted to them (unless they take delivery of their gold, which they can usually do within two working days).
http://www.invest.gold.org/sites/en/how_to_invest/gold_accounts/

One offered the unallocated accounts usually emphasize the advantage about the lack of storage and insurance charges, due to the right of the bank to lease the gold out.

Now that the gold lease rate is negative in real terms, some banks have begun to introduce charges even on unallocated accounts. Investors are exposed to the creditworthiness of the bank or dealer providing the service in the same way as they would be with any other kind of account.

The customers of this type of account are institutional investors, private banks acting on behalf of their clients, central banks and gold market participants wishing to buy or borrow large quantities of gold. Thats because of highest quantities to deal with this way (frequently over 1000 ounces)

Other opportunities for smaller investors include:,

Gold pool accounts : There are alternatives for investors wishing to open gold accounts holding less than 1000 ounces. For instance, in Gold Pool Accounts - where you have a defined, unsegmented interest in a Gold accounts pool of gold - you can invest as little as one ounce.

Electronic currencies : There are also electronic 'currencies' available - linked to gold bullion in allocated storage - which offer a simple and cost-effective way of buying and selling gold, and using it as money. Any amount of gold can be purchased, and these currencies allow gold to be used to send online payments worldwide.

Gold Accumulation Plans : Gold Accumulation Plans (GAPs) are similar to conventional savings plans in that they are based on the principle of putting aside a fixed sum of money every month. What makes GAPs different from ordinary savings plans is that the fixed sum is invested in gold. A fixed sum of money is- withdrawn automatically from an investor's bank account every month and is used to buy gold every trading day in that month. The fixed monthly sums can be small, and purchases are not subject to the premium normally charged on small bars or coins. Because small amounts of gold are bought over a long period of time, there is less risk of investing a large sum of money at the wrong time. At any time during the contract term (usually a minimum of a year), or when the account is closed, investors can get their gold in the form of bullion bars or coins, and sometimes even in the form of jewellery. Should they choose to sell their gold they can also get cash.

7. Gold Certificates

Pieces of papers issued by individual banks that can be exchanged for a stated amount of gold. This method offer investors to hold their gold without physical delivery. 

First issued by the U.S. government until 1933, but these US certificates now has been out of circulation for many years, and just become collectibles. Nowadays,  they're can be found through European banks, as well as Australia's Perth Mint. As for The Perth Mint, they run a certificate programme that is guaranteed by the government of Western Australia and is distributed in a number of countries.

8. Gold Mining Stocks
Get shares of gold mining company on stock market,


9. Digging For Gold
In this type of investment, depend on the situation and rule among countries, you can build your own small gold mining (sometime it can built side by side with a big gold mining company) or just digg the gold by yourself. Both of them need some tools to invest, next time I will continue to explain this type.


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