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How to Invest in Gold: A Comprehensive Guide

Do you want to buy physical gold? Did you know there are multiple ways you can go about doing this? Not many assets have had the same level of allure as gold as a hedge against almost any issue, including economic unrest, inflation, currency fluctuations, and war.

Don’t limit your gold investment to buying only physical gold in the form of bullion or coins. Purchasing gold exchange-traded funds (ETFs) or shares in gold mining companies are alternative ways of investing in gold. If you want to invest in gold, futures trading and options trading are excellent ways to do so.

Laymen often believe that buying pure gold coins is the only way to invest in this commodity whereas experienced investors often make use of gold futures or options.

It’s our assumption that the economic turmoil will continue throughout 2023 and perhaps beyond.  For this reason we are urging American’s to look into moving your 401k to a gold IRA.  

You don’t have to move all of it, most people advise 5-20%, but some go much higher.  It’s a move to help fight inflation as well as a drop in the stock market. 

If you are interested in getting a free gold IRA guide, our top recommended company for many years running, offers one here.   

Why Do Investors Like Gold?

How to Invest in Gold

Gold is frequently chosen by investors as a diversification and portfolio safety strategy. It often performs differently than stocks or bonds. Because of this, gold is a desirable investment opportunity for individuals seeking to reduce risk. A few reasons why investors love gold are:

Value Stores

Investors can store value in gold as a tangible asset. As investors diversify their portfolios, the tangible aspect of gold may be appealing.


Gold is a tangible asset, but it is still quite liquid. Therefore, it can be converted to cash easily.


Due to its different performance from stocks or bonds, gold often appreciates in value during recessions. Additionally, this enables investors to use gold to lower portfolio risk.


History has shown that gold has excellent returns. It occasionally falls short of other investment types, but overall, it still offers appealing returns.

Why Is Gold Valuable?

The historical connection between gold and the value of our currency is a major factor in the value of gold. Due to its malleability, gold was utilized for coinage and jewelry in the past. The notes were made to match a precise weight of gold once paper currencies were created. Even if this is no longer the case, gold continues to be valuable due to its historical significance in the financial system.

Is Gold a Good Investment?

If you’re looking to diversify your current portfolios, gold is a fantastic investment. Traditionally held investments such as stocks and bonds typically perform better than gold. Gold’s value often rises when certain assets perform poorly. This tendency has made many investors believe that gold is a secure investment, further emphasizing the value of including gold in a broad portfolio. 

Many new investors try to avoid investing in gold since it doesn’t produce a steady cash flow in the way that stocks or real estate do. However, many people are unaware that gold is actually extremely liquid, which means that because of the great demand, it can be purchased and traded fairly quickly. This benefit might make gold a more alluring investment option when compared to other alternative assets such as rare art or collectibles.

How to Invest in Gold

Gold Bullion

Physical gold bullion is the actual yellow metal, found either in bar or coin form. In comparison to other metals, gold is easier for the normal investor to obtain because one can do so from a gold dealer or from a brokerage or bank.

The sizes of pure gold bars range from a quarter-ounce wafer to a 400-ounce brick, although most novice investors choose coins. These are investments with prices based on its gold content plus a premium, not to be confused with antique numismatic coins.

Whether you choose to purchase in-person or online from a reliable dealer, whatever your preference, be sure you do so. Of course, a bank safety deposit box or house safe is necessary for the safekeeping of gold coins. Make sure you insure them as well.

Since most sellers base their prices on the latest spot prices, it’s a good idea to keep an eye on the gold price if you choose to invest in gold through bullion so you can choose the ideal time to buy.

Gold Coins

Gold coins are definitely one of the most popular options. Because of its smaller size, this well-known method of purchasing and selling gold is frequently more practical than gold bars. Investors can buy gold coins from collectors or dealers, then sell them for a profit when the price is favorable.  Most cities have dealers, so finding gold coins is simple. Therefore, buying gold bullion coins is a great place for new investors to start.

You could occasionally find gold coins that have been marked up because of its collector’s value. They may be more expensive than the gold itself because of the collector value. Unless they also want to become collectors, most casual traders will avoid these and concentrate on the gold coins that are more generally used.

Most gold investors stick with the most popular gold coins, such as the American Eagle, the Canadian Maple Leaf, and the South African Krugerrand, to ensure optimum liquidity.

Gold Jewelry

Gold Jewelry

Gold jewelry is another way that people invest in this commodity. According to the World Gold Council, the gold jewelry sector has the biggest demand for gold. Furthermore, gold is frequently combined with other precious stones and metals to increase the jewelry’s total worth and aesthetic appeal.

A piece’s sentimental value typically exceeds that of the item itself because it is frequently passed down to the next generation as a family treasure. If you want to invest in gold, jewelry is normally not the greatest choice because the retail price will generally be significantly more than the market value. This is a result of the retail markup and craftsmanship. Always check the gold’s purity before purchasing jewelry to avoid paying for 18 karats when you are actually receiving 14 karats.

Fortunately, most insurance policies cover gold jewelry.

Gold Futures and Options

Options on gold ETFs or options on gold futures may be of interest to more seasoned investors who don’t want to risk a significant amount of money. These agreements provide the right, but not the responsibility, to purchase or sell an item (in this example, gold) for a particular price and duration.

Whether you believe the price of gold is rising or falling, options can be utilized. The biggest risk when purchasing options is the premium you paid to obtain the contract if your prediction is incorrect.

Call and put options on gold futures are offered by the Chicago Mercantile Exchange and can be purchased and sold through a futures broker. Investors can trade options on the SPDR Gold Shares ETF in a normal brokerage account that has been approved for options trading.

However, some investors buy and sell gold futures contracts to estimate short-term increases or decreases in physical gold. These contracts are traded on CME under the symbol GC.

Futures contracts, on the other hand, are the responsibility to buy or sell a security for a set price on a specific date.

To invest in options or futures, you need to have an account with an online broker who deals in such products. These assets can be traded via a variety of online brokers. The account holder may need to sign additional documents recognizing the risks involved with the contracts.

After creating a broker account, you can use the website to directly purchase and sell options and futures. The commission charged by the majority of platforms varies according to how many futures or options contracts you buy or sell.

Traders who want to invest in gold through options or futures contracts must continuously monitor their holdings to roll over, sell, or exercise their options before they expire. Furthermore, each of these options has a predetermined level of debt or leverage, so investors who misuse them and experience market losses may soon see their losses escalate.

Gold Funds and Gold ETFs

Although owning physical gold has advantages over other assets, such as oil, it comes with drawbacks, including insurance, transaction costs, and storage costs. Instead, investors interested in a more accessible and affordable entry into the gold market would want to think about exchange-traded funds and mutual funds that mimic the commodity’s moves.

One of the first ETFs of its sort, SPDR Gold Shares (GLD), was established in 2004.

Similar to stocks, shares can be bought or sold at any time during the trading day on the New York Stock Exchange. One-tenth of an ounce of gold is represented by each ETF share.

GLD only invests in bullion, offering investors immediate access to changes in the commodity’s price. Other types of funds make investments in gold bullion as well as in the stock of publicly traded businesses engaged in gold mining, production, or refining.

Gold mutual funds actively managed by professional traders include Franklin Templeton’s Gold & Precious Metals Fund. When it comes to returns, these funds aim to outperform index funds that are passively managed. 

In general, the price of gold stocks fluctuates more quickly than the price of gold itself. Aside from bullion pricing issues, specific businesses may also experience environmental or political issues. Therefore, investing in an ETF that owns gold stocks is riskier than investing in gold bullion, but it does have the potential for value appreciation.

Gold Mining Stocks

You can always think about buying gold mining stocks from gold miners if you are unable to obtain the metal directly but want to invest in gold.

Gold miners that specialize in gold exploration and mining offer stocks to the public. They also consist of gold streaming and royalty businesses.

Investors have the most upside potential when investing in gold mining companies. They can invest in new mine development, mine expansion, and the purchase of another gold miner to increase production and exceed the price of gold. These companies may also distribute dividends, giving investors a stream of income based on gold. Since investors may readily buy and sell gold stocks in a brokerage account, gold stocks are quite liquid.

Although, keep in mind that these stocks might not always increase along with gold prices since the success or failure of gold mining companies relies on how well they run their businesses, generate a profit, and handle their capital. If the gold mining company you buy fails, you are not guaranteed physical custody of the precious metal.

Therefore, investors have to be willing to take on the risk that the shares can trade lower than the actual value of gold.

Factors to Consider When Buying Physical Gold

The many advantages of gold make it a viable investment. Before trying to purchase physical gold, there are a few things you should be aware of. Finding an honest gold seller is the first and most crucial step. There are a number of gold-related frauds out there. Not only do you want to avoid slipping into a trap, but you also want to make sure you don’t invest too much or too little because of the seller. To identify reputable sellers, search online resources and make inquiries about their fees and other related costs.

The majority of the most well-liked investments in today’s market don’t need any particular storage, but gold is an exception. Safe storage is required for physical gold. Think about getting a safe for your home or renting a safe-deposit box if you want to invest in gold. These expenses are crucial to consider when investing in gold, but they are a given if you choose to purchase the physical metal. Consider getting insurance for your asset depending on where you keep your investment. This could increase your investment’s overall security.

Now that You Know How to Invest in Gold, What Are You Going to Do?

Buying gold isn’t the only way to invest in gold. Gold could provide you with a safe haven for your investments if you’re worried about inflation and other risks. Although it can be just as volatile in the short term as equities, gold has surprisingly kept its value over very long periods of time.

You may decide to invest in actual gold, gold ETFs, gold stocks, gold mutual funds, speculative futures and options contracts, or mutual funds depending on your personal preferences and level of risk tolerance. Regardless of the type of gold you select, the majority of consultants advise you to only invest 10% of your portfolio in it.

Any type of investing involves risks. The same applies to gold investment. The peculiar gold market, however, is difficult to understand and is not forgiving. As a result, for the majority of investors wishing to add some of gold’s stability and radiance to their investment portfolios, mutual funds and gold ETFs are the safest options. Stocks in gold miners are quite risky as numerous factors affect the value of the gold investment.


When Should You Buy Gold?

There are several ways that gold differs from other investment forms, but its method of acquisition stands out. While other assets, such as commercial or residential properties, can be bought all at once, gold should be bought in smaller amounts. To counteract price swings, investors often decide to buy physical gold bullion, gold bars, or stocks over time. Your choice of the gold method you want to use will determine when to make your initial deposit. If you’re looking for a solid indication of when to start, keep an eye on the price of different equities and the value of this precious metal.

How Much Gold Is a Good Investment?

Gold investments are personal to the individual buying gold. Therefore, there is no right or wrong answer to this question. A decent rule of thumb is to keep roughly 10% of your assets in gold investments, as most investors use gold to diversify their current portfolios. This enables you to reduce risk while still allowing you to make money from investments in gold. To make sure you keep a percentage with which you are comfortable, review your portfolio from time to time.