Gold has been used as a store of value since long before paper money arose. Though investing in gold is ancient, it has become easier with electronic trading. Online trading has given investors multiple ways to invest in gold securities at the touch of a button.
Ways to Invest
There are many different ways to invest in gold. These include direct investment in gold-miner stocks, exchange-traded funds of gold-miner stocks, royalty trusts of gold mineral rights, holding physical gold bullion or coins, and purchasing ETF shares of publicly traded gold vaults. With the exception of ownership of physical gold, each of these investment options can be accomplished easily online.
Owning shares in gold miners is one way to gain exposure to variations in the gold price. The gold mines that they own or control may become more valuable when the price of gold rises. Particular companies may profit disproportionately if they keep their costs from rising as fast as the price of gold. Gold stock investors can benefit from rising stock prices or from dividend payments.
Investors can easily diversify their investment in gold-miner stocks by purchasing them through shares of gold-miner ETFs. Investors should inspect candidate ETFs to make sure that they do not charge excessive management fees and that they are appropriately diversified.
Investing in gold miner stocks involves many risks. Some do not fully benefit from gold-price appreciation because they have purchased gold derivatives or sold rights to future output at fixed prices. These actions effectively remove or reduce a company's exposure to upward and downward gold-price movements. These stocks also may not fully benefit from gold-price appreciation if the miners' costs appreciate faster than the price of gold itself.
Many gold miners operate internationally and are subject to legal changes that favor local governments. For example, Ernst & Young's June 2013 Mexico Quarterly Briefing listed legal issues facing miners in various countries, from the repercussions of Venezuela's gold mine nationalization to tax and royalty hikes in multiple countries.
- Photo Credit Stockbyte/Stockbyte/Getty Images
How to Invest in Gold Futures
How to Trade Gold and Silver Futures. Trading in precious metals futures, specifically gold, silver and platinum, is like trading other commodities...
How to Learn Gold Trading
Gold is a precious metal whose physical properties and rarity have given it universal popularity since the dawn of civilization. Besides its...
How to Trade Silver Stocks Online
How to Trade Gold Stocks Online. Learn how to trade gold stocks online and start bringing in some extra income. There are...
How to Buy Gold Stock
Investing in physical gold comes with a significant list of inconveniences, including transport, security, purity verification and significant dealer buy and sell...
How to Trade Gold Coins for Cash
Gold coins have been used for commerce for thousands of years. They are prized for their historical and artistic value as well...
How to Open an Online Trading Account in Dubai
Online trading is fast and costs less to trade and maintain than a traditional brokerage company. Everything pertaining to your account ......