What You Should Know About Investing In Gold Bullion and Securities

“What is worth more than gold?” Well, life is. However, humans have cherished the precious metal for many centuries, and to date, they still hold it in high esteem.

There is a lot of fuss going on about investing in precious metals. Today, anyone and everyone can get a piece of the golden cake.

You can either purchase physical gold in bars or as jewelry or invest in securities. Whatever your options are, we think you need to know what you are getting into – or don’t you?

There are several reasons to invest in gold. Some professional investors suggest that 10% of your portfolio should be gold. It is a means to protect your investment since inflation does not affect it – you could say it is a haven asset.

However, investing in bullion is a big step. It requires that you take proper measures to partner with the right company. You can read the Schiff Gold review to know more about such investments.

Before now, only the elites and a few others owned the precious metal. It was an asset of high value only few could afford. However, this is not the case now.

As much as the metal still retains its value, there are several ways people could invest in it. The two popular ways include buying bullion or investing in securities (paper assets).

How to Invest In Physical Gold

Purchasing hard precious metal is a good option. However, ensure you register with a verified depository. You do not want to attract thieves to your home by keeping it there.


Bullion is pure physical gold. It is mainly in bars, ingots, rounds, or coins. The bars vary from a gram to some four hundred ounces, costing over seven hundred thousand dollars. You will find heavy bars like that held in government facilities.

Investment-quality bars have 99.5% purity. You can see the percentage purity, manufacturer’s name, and weight.

You could purchase them from an online retailer. They often offer markdowns for bulk purchases. However, you will pay at a higher rate than the spot price.


The US government and private mints manufacture these coins. You can use them to make payments for transactions. However, they have lower values when compared to their gold value. For instance, an ounce of the American Eagle coin is worth $50 but, in reality, is worth over $1500.

There is a special kind of coin called collectibles. They have a higher value than regular coins because of their rarity and higher demand. You can click here to read more about coin collecting.

The coins come in various sizes to accommodate the purchasing power of investors. You can purchase about an ounce in size.

They have a guaranteed purity of about 24 karats. You can get them from coin shops, mint manufacturers, or online dealers.


People can also invest in gold by buying pieces of jewelry. For instance, if you purchased jewelry in the 19th century, it will cost much higher now. However, keep to heart that in buying jewelry, you will be paying more for the artistry of the jewelry. It will also contain less quantity of gold than it weighs.

In other words, you will get less gold at a higher rate. For instance, some jewelry used in the United States is 14K class gold. They contain only 58% purity and, 42% are impurities like silver and copper metals.

How to Invest In Gold Securities

While investing in securities might be a cheaper option, you may need some knowledge and experience to trade them. In addition, you will need to open an account with a broker. They will make transactions on your behalf and provide other services. You may choose from any of the following investment options:

Exchange Trade Funds (ETFs)

ETFs allow you to invest in funds that own the physical metal. The funds might have them stored in the UK but, you could invest from anywhere in the world.

To invest in ETFs, you will need to register with a stockbroker. You can do this online or at their physical office. You will need to pay fees typically low compared to other investment options like mutual funds. You can pay about $59 for every $10,000 you invest.

While some ETFs own physical bullion, some others reinvest in mining them. Miners require funds to handle mining processes so some ETFs invest in streaming companies or mining stocks.

Mutual Funds

These are funds that invest in refining companies or mines stocks. They are beginner-friendly but can be very volatile.

Mutual funds have higher fees compared to ETFs. Because they have a dedicated team of fund managers that conduct research, analyze potential stocks, and make investment decisions. You can purchase them through a broker online.

Mining Stocks

If you are looking for an instrument with more volatility than gold, mining stocks are your best bet. Investors can choose to invest directly in stocks of mining firms.

However, you need to have some knowledge of analysis. You do not want to end up with dump stocks. You can click on https://www.gold.org/ to read more about mining stocks.

Futures Contracts

These are not for newbies and require experience and expertise. As the name implies, it is an agreement between different parties stating that a certain share of gold will trade at a particular price in the future.

When the agreement is due, the buyer collects the gold equivalent. Trading is in betting form. Spectators can analyze the metal and predict its value before a specified date.

The contracts are worth over 100 troy gold ounces and have their prices quoted in dollars/ounce for traders in the US. In the US, investors trade in NYMEX (New York Mercantile Exchange).

Futures provide investors with leverage. It makes it possible to bet only a portion of their portfolio. But, if the prices go against you, it will demand additional investments to sustain the contract. If there is no addition, you can lose your initial investment amount and even more.


These days, everyone can invest in gold. You can either buy a physical version of the metal or invest in securities. Whatever option you choose, ensure you choose a verified seller or broker.

Investing in securities is less expensive. However, it requires some knowledge of analysis and can be volatile. Investing in precious metals is risky. Therefore ensure you take proper risk management steps before going into it.

Similar Posts