How to buy Gold

How to buy Gold as a means of preserving wealth

We cannot give information on how to buy gold without telling why you should buy Gold. Investors tell you Gold is a means of preserving wealth and that is 100% true. Gold as an asset is very reliable and the price will always stay the same the no matter the conditions. It is no doubt that navigating the Global market have been very challenging over the past few months. Due to fluctuations in the market, investors have turn to other asset classes to reduce portfolio volatility as uncertainty remains.

One such diversification tool is gold. With the rand price of gold reaching record levels in March, investors have been pondering if gold is a good investment currently and how to gain exposure. Gold is a commodity that is favored in times of extreme volatility. It is seen as a safe haven for investors and its price tends to increase when uncertainty results in diminished returns in other asset classes. As gold is valued in dollar terms, a depreciation in the rand is positive for returns.

As a business man you should always lean towards assets that are safe and Gold is right at the top. Whenever there’s fluctuations in the market, the only asset that is safe to buy is Gold.

Best ways to buy Gold

Before buying Gold as an asset, you should be very clear on the type you want. Below are the various Gold assets:

• Physical Gold which includes; bars, coins, jewelry.
• Gold ETFs also known as Financial Investments and includes; Gold Funds, Gold Futures and Gold Stocks

Buying Physical Gold

For those looking to buy Gold as an asset, Physical Gold is the way to go. You can buy Physical Gold from Individuals especially Vasco Gold. This is good because physical gold is marked up from the spot price. Anyone can buy physical Gold and there’s no requirement. You do not have to own an investing account to buy physical gold and the main factor that influences how much it is worth is the underlying price of gold (as well as how rare it is—a stronger factor for gold jewelry).

Buying Gold ETFs

These include gold funds (e.g., ETFs and mutual funds), gold futures, and gold stocks. While the various forms of physical gold are mostly similar (consider a gold bar and a gold coin that differ mostly in size), financial gold investments can vary substantially. Investing in gold this way necessitates an investment account (such as an individual brokerage account or IRA). Buying gold-related investments typically involves more complexity compared with owning physical gold, as there can be multiple factors that influence each investment. Let’s break each one down so you can get a sense of the different aspects.

• Gold funds: ETFs and mutual funds are investments that hold a basket of individual investments. A gold or commodity-focused ETF or mutual fund can be the simplest way to invest in gold without the need to taking physical ownership. The price of a gold ETF, for example, is linked to the price of gold, and investors can buy and sell shares of the ETF like they can a stock. Gold funds might also be made up of individual gold mining stocks, which could reduce concentration risk (the risk of putting all your eggs in one basket, so to speak). To add, funds have unique characteristics, and they have many of the same risks as individual company stocks.
• Gold futures: These contracts are a derivative (i.e., their value depends on an underlying asset—gold in this case) that allow you to buy or sell a specific amount of gold at a specific price at a specific date in the future. Futures contracts have the advantage of attempting to directly track the price of gold (compared with, say, gold stocks that are influenced by a number of factors). However, futures are generally a bit more complex than stocks. For example, gold futures allow you to take physical delivery of the metal, although most gold futures traders do not take delivery. Instead, they will settle in cash for whatever the difference is between what they paid and what the current value of the futures contract is, or roll over the contract into a longer-dated futures contract. If this sounds complex, that’s because it can be if you don’t know how the process works, relative to simply buying physical gold or a gold stock. Note that Fidelity does not offer futures trading.
• Gold stocks: Investors might consider individual stocks, such as those for public companies that mine for gold (and other metals), as a way to get indirect exposure to the price of gold. As the price of gold changes, so too can the value of these types of companies. A major difference between investing in a gold miner’s stock (or gold funds) and investing in gold futures is simplicity. Buying a stock is relatively straightforward and does not involve potentially taking delivery of gold. With that said, owning stock can involve more risk than buying physical gold (although you do not need to worry about safeguarding and storing physical gold when you buy a gold stock). Moreover, gold mining stocks do not provide pure exposure to the price of gold. A gold mining company, like any other company, can have a variety of factors that influence how it performs. Consequently, an investor would want to do their research on the individual company.

Conclusion

How to buy Gold can seem difficult at times depending in the type of asset you want. If you are looking at the way of physical Gold then Vasco can help you. We are vendors of Gold dore bars, Gold nuggets, Gold coins, Silver and other precious metals.

The reasons for buying Gold differ from investor to investor. Some investors see Gold as means to help improve the diversification of their portfolio. Other investors may see an opportunity to buy and hold gold with the expectation that it will increase in value. Regardless of why you are interested in buying gold, knowing the various ways that you can buy it can help you make the best decision for your goals and risk tolerance.