How to Buy Gold for Profit
Gold has long been considered an investment to protect against currency inflation, and against losses in a stock portfolio. However, purchasing gold in various forms has also been used to turn a profit. Generally, the gold-profit concept is simple, in that it involves selling the gold for more than you purchased it. Nevertheless, there are two major methods by which you can buy gold for profit: gold bouillon and gold exchange-traded funds.
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Instructions
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Buy gold bullion at a local store or online. Gold bouillon merely refers to physical gold bars or coins. Many websites now offer the ability to purchase physical gold. Before purchasing the bouillon, make sure that the price per ounce does not exceed the spot price by 10 percent. The spot price is the price of gold that fluctuates throughout the trading day on a stock exchange, most commonly the New York Stock Exchange. Spot price can be determined by conducting an Internet search for gold spot price.
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Hold onto the gold bouillon until the spot price of the gold rises above the purchase price. Sell the bouillon for a profit to a local buyer or jewelry store. Deciding when to sell your gold will depend on your tolerance to risk and desire to obtain a quick profit.
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Invest in a gold exchange-traded fund, also known as an ETF. A gold ETF is an entity that purchases gold bouillon. You then purchase shares in the ETF. Thus, buying shares in a gold ETF is an indirect way of owning gold. Investing in a gold ETF may be safer than purchasing physical gold, as shares in an ETF cannot be easily stolen or lost, and the ETF has the ability to purchase gold at a lower price due to volume and other factors.
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Sell your shares in the gold ETF when they rise above the purchase price. Gold ETF shares are bought and sold on the stock market.
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Tips & Warnings
Investing in gold, like any investment, has inherent risks. You cannot predict that gold prices will increase. Your gold investment may lose value.
