As one of the world’s most important metals, Gold has been the groundwork for monetary systems for hundreds of years. The gold standard exists no longer, but, the demand for the metal has picked up as of late, mostly due to its stability, and it now acts as an alternative to fiat money.

If you are looking for gold investing advice, consider the factors that make gold an asset. First and foremost, the demand for gold could rise if investors turn against fiat currencies, especially the U.S dollar. Second, investors will be able to protect parts of their portfolio as gold acts as a possible hedge against inflation. Third, gold investing is still very important in the market as the metal is in heavy demand for its use in jewelry. In fact, it seems unlikely that jewelry will stop using the metal anytime soon, therefore, gold investing will always be an option in the market.

For those thinking about making a gold investment, know that you have options. Along with being eligible to buy futures contracts on gold or purchasing and holding the metal in coins or bars, prospective investors have the option of exchange-traded funds and equity as well. For instance, investors could purchase stocks or ETFs of companies that mine gold or companies that search for gold. Last but not least, investors could buy gold ETFs. These ETFs could either: A) track the futures for the metal or B) hold the metal in a protected vault.

Investing in Gold:

Currently, there are four ways to invest in Gold and that is through exchange-traded funds, futures, physical, and stocks.

Gold ETFS: What Are They?

If you’re looking for exposure to gold before making a gold investment, know that exchange-traded funds are a popular and attractive route to take. This popularity stems from the fact that gold ETFs minimize expenses and eliminate physical storage problems. With physically-backed funds and products that receive exposure via gold futures contracts, there are numerous gold ETFs available to investors. To name a few, here are the top 5 gold ETFs available to investors in the United States:

1. Gold SPDR ($GLD): This is the second largest United States listed exchange-traded fund
2. COMEX Gold Trust ($IAU): As one of the four exchanges for the CME group, COMEX has the cheapest gold ETF (0.25%)
3. Physical Swiss Gold Shares (BMV:$SGOL): There is an underlying bullion vaulted in Switzerland
4. Physical Asian Gold Shares ($SGOL): There is an underlying bullion vaulted in Singapore
5. PowerShares DB Gold Fund ($DGL): This is a futures-based fund

Additionally, there are a variety of inverse and leveraged gold ETFs as well. Aside from the leveraged gold ETFs, investors have the option of ETFs which give exposure to stocks of companies who are involved in gold extraction. Due to their profitability, the following companies provide exposure to gold prices:

– Gold Miners ETF (NYSEARCA:$GDX)

– Junior Gold Miners ETF (NYSEARCA:$GDXJ)

– Gold Explorers ETF

– Pure Gold Miners ETF

Gold Futures: What Are They?

As one of the most active futures markets in the world, gold futures are traded on the COMEX under the GC symbol. Priced in U.S dollars and cents per troy ounce, COMEX futures contracts serve for 100 troy ounces of gold. Trading is eligible for delivery during the current month, the next two months, any February, April, August, and October which falls within a 23-month period. Additionally, trading is conducted in any June and December which falls within a 72-month period starting with the current month. COMEX gold futures terminate trading on the third last business day of the delivery month and their gold futures are for physical delivery.

Buying Physical Gold:

Some investors would rather make their gold investment by purchasing physical gold. This is a popular route as it rids any issues seen with futures contracts and it ensures that the value of the assets which are being held are moved when spot gold pricing moves. If you were to take away one piece of gold investing advice, it should be the following: gold has a high value to weight ratio, therefore, storing a certain amount of gold will be considerably cheap. With that said, the value of gold means that investors should plan to find secure storage.

Another gold investment option is to purchase gold coins and gold bullion from companies. However, keep in mind that there might be a premium to purchase these coins. Additionally, prospective investors should figure out if any of their purchase bullion meets certain standards.

Furthermore, those looking to make a gold investment can gain initial exposure to physical gold via exchange-traded funds with underlying assets that consist of bullion stored in safe vaults. It’s worthwhile noting that the majority of gold ETFs are physically backed, such as GLD, stored in London; GSOL, stored in Switzerland; AGOL, stored in Singapore.

Buying Gold Stocks:

Before committing to a gold investment, some investors find it beneficial to first gain exposure to gold prices. This can be accomplished through the stocks of companies who are involved in gold extraction. The two main benefits of gold miner stocks include the following: generally speaking, these stocks tend to have a strong correlation to spot gold prices, and they are also able to be traded as a leveraged play on the underlying commodity.

Additionally, there are a variety of publicly-traded gold investment companies around the world, including:

– Barrick Gold ($ABX)

– Goldcorp ($GG)

– Newmont Mining ($NEM)

– Eldorado Gold ($EGO)

– Gold Fields Limited ($GFI)

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