How to Invest in Gold
There are many ways to invest in gold. Different products can be used to achieve a variety of investment objectives.
Investors should consider the options available in their market, the form of investment that is appropriate to their circumstances, and the nature of professional advice they will require.
Investors can buy physical gold through coins or bars; they can buy products backed by physical gold, which offer direct exposure to the gold price; or they can buy other gold-linked products, which are directly related to the gold price but do not include ownership of gold.
In recent years, innovation has led to products that offer greater flexibility and accessibility to investors, such as exchange-traded funds (ETFs) as well as additional risk management tools for sophisticated investors, including derivatives and structured products.
The various gold-related investment products have different risk and return profiles, liquidity characteristics and fees. Typically, an asset allocation strategy will consider long-term versus medium-term returns, and how gold investment products perform in positive or negative correlation with other assets.
Bars and coins
Purchasing gold coins and bars, either to store personally, or to be held securely on one’s behalf by a bank or other financial intermediary.
- Collector coins
- Gold bullion bars
Exchange-traded funds (ETFs)
Financial products physically backed with allocated gold bullion, listed on a stock exchange, and bought and sold in the form of shares.
Gold bullion stored and managed by a bullion dealer or depository.
- Allocated gold accounts
- Unallocated gold accounts
- Gold accumulation plans
Other gold-linked products
Indirect investments in gold, via financial instruments, without direct ownership of the metal.
- Gold mining stocks
- Futures and options