Gold investment has been around for centuries. Seen as one of the most important precious metals in human history, this type of investment has always required space to store it physically. This could be in a safe or with a third party. However, these methods cost a fair amount of money on top of the gold itself. Fortunately, there are ways around that.
In this guide, we’re going to break down just how you can invest in and hold gold without needing to store it yourself.
Cryptocurrencies have become a mainstream conversation topic. While most people talk about Bitcoin, there are other types of digital assets to invest in. One example of an alternative is gold stable coins.
A stable coin is essentially a cryptocurrency that’s tied to the value of a physical asset. This means there’s no artificial volatility to worry about. Instead, it’s all about the price of the physical asset.
One popular gold stable coin is GoldCoin. This crypto asset is powered by the Ethereum blockchain network, making it an ERC-20 token. This means it’s entirely secure, thanks to the security of a decentralized network.
Otherwise, this means you can buy fractionalized amounts of physical gold. How? Because every GoldCoin is 1/1000th of an ounce of gold. That means you can buy less than one ounce, saving you money in the long run and making the metal more accessible to all.
It’s also a private investment due to blockchain technology, meaning privacy-focused users should have no problem getting involved. You simply need an Ethereum wallet in which to send your funds.
That said, cryptocurrencies are quite an untested industry, so be wary of that before investing.
Gold Mining Stocks
What’s interesting about gold mining stocks is that, in a way, you’re still investing in gold. But, rather than investing in its direct price, you’re attempting to profit based on the companies that mine the metal.
This is an easier way to invest in the benefits of gold, as most investors are already involved in the stock market. Grabbing a gold mining stock is as simple as adding to the stock portfolio.
However, note that even if gold prices are on the up, that doesn’t necessarily mean your gold mining stock value will rise. The mining company you choose could have a fire or tragic incident, putting it on hold. Or there could be political trauma between your country of residence and the one where your stock is. This could make it much harder for the company to export gold, ruining its price for the time being.
Similar to gold mining stocks, gold ETFs represent a fairly accessible way to invest in everyone’s favorite metal.
If you didn’t know, an ETF or exchange-traded fund is an investment method not unlike the stock market. Essentially, it’s a fund meant to track the price (or prices) of certain investments. It might combine more than one investment to generate a more accurate price, for example.
A gold ETF will likely combine gold mining stocks, gold-related companies, and stocks, and even gold itself. It’s a fund you can invest in and trade on an exchange with no hassle, increasing market access for all.
There are also different types of funds. You can invest in an Industry fund that tracks the gold industry overall. Or, you can look into Commodity ETFs for more of a focus on the metal alone. It’s quite a versatile option for traders of all types.
Gold futures are easy to invest in without going anywhere near the precious metal, but it’s also riskier than most methods.
Futures require you to bet on the price of gold. You’re putting money down, hoping the market either rises or falls in your favor. If things work out, you might earn more than with traditional gold investments, depending on what you’ve put down.
But, do not touch futures if you’re a new investor. The risk involved with futures is not suited to an inexperienced trader. Succeeding with futures requires a solid understanding of the market, ensuring you can predict its ebbs and flows with relative ease. Getting in early is just asking to lose your money.
While there are other ways to invest in gold without holding it physically, the aforementioned are some of the most popular. Each method offers its own pros and cons, tailoring to investors of all knowledge levels.