Investing Money on Gold

in LeoFinance10 months ago

Many top investment experts recommend a portfolio allocation to commodities, including gold, to reduce total portfolio risk. There are several ways to invest in gold. These include bullion (gold bars, coins), futures contracts, mining firms, and jewelry. With a few exceptions, only bullion, futures, and a few specialty funds offer a direct investment in gold. Other investments get some of their value from somewhere else.

Gold Bullion

Some people think of gold bullion as the large gold bars held at Fort Knox, KY. While massive gold bars are remarkable, their great size (up to 400 troy ounces) makes them illiquid and so expensive to buy and sell.
And if you own one enormous gold bar worth $100,000 as your whole gold holding and wish to sell 10%, you can't just saw off the end of the bar and sell it. Bullion stored in smaller-sized bars and coins, on the other hand, gives significantly more liquidity and is quite prevalent among gold owners.

Sovereign nations all throughout the world have issued large quantities of gold coins. Gold buyers often purchase coins from private dealers. There is premium attached above the underlying gold value (referred to as spot price). Premiums are anywhere from 2% to 5%. But in recent years, some premiums have risen to around 10% and higher in some situations.

Bullion coins have benefits. Their prices are readily available in worldwide financial periodicals. Gold coins are commonly struck in smaller sizes (one ounce or less), making them a more practical way to invest in gold than larger bars. Reputable dealers and vendors are easy to find and can be found in many major cities.

Buying bullion in gold bars and coins is a direct investment in the value of gold. Each dollar change in the price of gold affects the value of one's assets proportionally.

Gold-based Exchange Traded Funds (ETF)

A gold-based exchange-traded funds is an alternative to a direct purchase of gold bullion. Each share of these specialized instruments represents a fixed amount of gold, such as one-tenth of an ounce.

These funds may be purchased or sold just like stocks, in any brokerage account or individual retirement account (IRA). It is easier and more cost-effective than owning bars or coins directly—especially for small investors, as the minimum investment is only the price of a single share of the ETF. The annual average expense ratios of these funds are often much less than the fees and expenses on many other investments.

Gold Jewelry

Jewelry accounts for approximately 55% of global gold production.
With the world's population and income increasing on a yearly basis, the demand for gold used in jewelry creation should rise over time. Gold jewelry customers, on the other hand, appear to be price-sensitive, purchasing less if the price rises rapidly.

Purchasing beautiful jewelry at retail rates entails a significant markup—up to 300% or more above the base gold value. Estate sales and auctions can have better jewelry deals. The benefit of purchasing jewelry in this manner is that there is no retail markup; the negative is the time spent looking for valuable pieces.

Nonetheless, jewelry ownership is a fun way to possess gold, even if it is not the most profitable investment option.

In conclusion

The best gold investment for your portfolio is determined by your finances and investing goals. Large and small investors seeking direct exposure may decide to invest in gold bullion, although this comes with a premium and storage charges. Exchange-traded funds (ETFs) and mutual funds that follow the price of gold provide low-cost exposure with modest minimum investments. However, because funds differ in their investment methods and fee ratios, it is critical to conduct research before purchasing these shares. Investing in gold mining businesses can provide additional exposure to the commodity, but these equities don't usually closely reflect gold's long-term performance. Finally, purchasing jewelry can be a gratifying way to acquire gold, though it is less likely to generate investment rewards.

References:
https://money.usnews.com/investing/funds/slideshows/best-gold-etfs-to-hedge-volatility
https://www.statista.com/topics/5163/jewelry-market-worldwide/#dossier-chapter2
https://www.callagold.com/metals/rule-of-thumb-in-calculating-the-cost-of-gold-jewelry/
https://www.kitco.com/ind/Shaefer/2014-01-29-5-Mistakes-People-Make-When-Buying-Gold.html
https://www.kitco.com/charts/livegold.html

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I am not a financial adviser. This article is not meant to be financial advice. My articles on cryptos, precious metals, and money share my personal opinion, experiences, and general information on cryptos, precious metals, and money.
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Trading fiat paper for Precious Metals.
Old $5.jpgThis for that:
IMG_4609.jpg Thanks for the reminder, SILVER SAVER - @silversaver888.

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Thank you for contributing more great content to the #SilverGoldStackers tag.
You have created a Precious Gem!

My preference remains those old coins, primarily gold... a blend of history, numismatics and precious metals. There are quite a few 100+ year old gold coins that can be had for relatively little premium over the gold value.

=^..^=

DenmarkCoin-1876d.jpg

That's precious!!! Gold coins are my favorite too. It took a while, but my gold coins are in decent quantity now... mostly for stacking! Thanks for coming, and your comment!

Back in the days of the Spanish Empire, gold jewelry was not taxed but gold coins were taxed by the King. Of course many of the Spanish affluent had the majority of their holdings in jewelry form.
Today, the laws may be a little different in every country but consider your choice of physical gold in either form of Commodity as in a bar, or as in a form of a legal tender coin, there could be significant different Tax treatment in each case.

Always, with love 🤗🌺❤️

It is funny, but gold is not taxed, except when you get it at Ebay dealers.
xoxo🤗
!LADY

We'll never be sure what stupid tax law our Canadian Prime Minister will try next. Now I'm looking for an exchange in place of Binance, or put everything into cold wallets.

Nice post! Gold is always a great investment. I stay away from jewelry personally unless it's basically at spot, then again I don't wear jewelry!
!lol

Hahaha, you can certainly wear a gold band!
Yes, gold is a good store of wealth!
!PIZZA

Pass on the gold band, tried that twice already!

What did the Golden Gate bridge say to the Golden Gate river when they broke up?
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Thanks for the rehive and !PIZZA

I don’t have much gold at all….

You have enough gold! Someday, if you feel like it, you might add to it.
I guess it depends on our preferences.

Nah, I barely have any gold. But I have silver.

Good information sis, to have, especially for any new investor out there searching for information! Thanks for sharing and have a lovely evening! Much love!🤗😘💕🌸 !LADY

Two to go! This was a quest wherein you chose any topic about money!
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Invest in gold in term of jewelry is not a good idea I think.I also do this same but no use. Gold makers got the benefits and used debasment.

Yes!
Thanks for your comment, @qwr !

It's always nice to be able to enjoy your gold, that's why a lot of times gold jewelry for Liz is the perfect gift @silversaver888😍
Or I switch to fractional gold for easy exchange for Fiat in the future!!😀

Yes, people should diversify portfolio. But everyone has to keep on mind "not your keys, not your crypto". And the same for PM. If you don't have your own coins/bars in your property, you will probably lost it in the future. Exchange could close, the government could steal your gold...

So I have my own gold in my own hands... Wait a second, I don't have any gold! I don't have any crypto ;)

You are a great stacker miss.

Buen punto, inversión en oro, para garantizar finanzas estables, monedas acuñadas en oro buenas para negociar en comparación con un lingote, interesante información.

Mil bendiciones.

I plan to start investing in fractional gold coins soon as some more money frees up.

Gold bullion is really the way, not your keys not your crypto type deal 🤣 gold jewelry is awesome but most the time has a hefty premium

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Another great picture. !LUV