Whether it’s coins, bars or ETFs, investing in gold is a hot topic these days as it’s almost up to $1,000 an ounce. What’s interesting about this commodity is that unlike others, gold is not consumed or used. Therefore, pretty much every ounce of gold ever minded is still potentially available. Therefore, the price of gold is more a reflection of availability than the need for consumption.
In the old days, the only way to invest in gold is through buying the actual commodity, or owning some type of gold jewelery. In the modern day, the easiest way to invest is through the ETF from streetTRACKS Gold Shares (GLD) through a broker (like Tradeking, here’s a review). What essentially happens is that this ETF buys and owns gold on the investors’ behalf, paying for transport, storage and security of the commodity and in return, charges a small fee for it. For the investor, buying the ETF is the best option because it provides liquidity and offers a hands free approach to investing in gold.
Why Invest in Gold
Most investors buy gold as a hedge against political or economic crisis, and of course, to speculate on the increase in gold prices.
However, since gold doesn’t have any earnings power and there is no consumption of this metal, this commodity should only be a small portion of anyone’s portfolio.
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However, since gold doesn’t have any earnings power and there is no consumption of this metal, this commodity should only be a small portion of anyone’s portfolio….
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Johnpeter