From the ancient civilizations through the modern era, gold is considered as the currency of choice across the globe. Nowadays, the investors purchase gold mainly as a hedge against inflation and political unrest. Aside from that, numerous investment advisors recommend allocating a portfolio in commodities including gold to reduce the overall portfolio risk.
Gold Bullion
It’s perhaps the most renowned form of gold ownership. A lot of people think of gold bullion as a big gold bar. But, basically, gold bullion is any kind of pure gold that has been certified for its purity and weight. This includes bars, coins, and others things of any size. Commonly, there’s a serial number attached to the gold bars for some security purposes.
While gold bars are very impressive sight, their big size makes them illiquid and costly to sell and buy. Besides, if you own a big gold bar worth of a thousand dollars as your entire holding in gold and decide to sell ten percent, you cannot exactly saw off the bar’s end and sell it. On contrary, bullion held in the smaller-size is better. We suggest 1oz max for gold!
Gold Coins
For many years, quantities of gold coins were issued by the sovereign government across the globe. For investors, the coins are commonly purchased from the private dealers at about one to five percent above their underlying gold value. The best thing about bullion coins is that their prices are available conveniently in global financial publications. Oftentimes, gold coins are in smaller sizes, which make them a convenient way to invest in gold compared to bigger bars. The reputable dealers may be found with minimal searching and in big cities. However, you have to take note that rare, older gold coins have higher value compared to the newer ones. To invest in gold, concentrate on circulated coins and leave every rare coin to the collectors.
Some circulated gold coins include the Canadian Maple Leaf, US eagle, and South African Krugerrand. The only concern with gold bullion is that the insurance costs and storage. The big markup from the dealer both hinders the potential of the profit. In addition to that, investing in gold bullion is basically a direct investment in the value of gold and every dollar change in the gold price will change the value of the holdings. Some gold investments including mutual funds can be made in small amount than bullion and might not have as much direct price exposure in comparison to what bullion does.
Bigger investors who want to buy gold Toronto to have direct exposure to the gold’s price may consider investing in gold directly with bullion. For those who are a bit aggressive, options and futures will definitely do the trick. However, buyers must be cautious that such investments are derivatives of the price of the gold and may see sharp moves. Gold jewelry investment is a bit quaint, yet naïve. But, depending on your preferences, you may choose any option that’s suitable for you.
Contributor http://durhampreciousmetals.com