How to buy Gold
"Gold has a proven track record for returns, liquidity, and low correlations, making it a highly effective diversifier," says Juan Carlos Artigas, global head of research at the World Gold Council.
These qualities are especially important for investors:
- Returns: Gold has outperformed stocks and bonds over certain stretches, though it doesn’t always beat them.
- Liquidity: If you’re buying certain kinds of gold-based assets, you can readily convert them to cash.
- Low correlations: Gold often performs differently from stocks and bonds, meaning when they go up, gold may go down or vice versa.
In addition, gold offers other potential advantages:
- Diversification: Because gold is generally not highly correlated to other assets, it can help diversify portfolios, meaning the overall portfolio is less volatile.
- Defensive store of value: Investors often retreat to gold when they perceive threats to the economy, making it a defensive investment.
Those are a few of the major benefits of gold, but the investment – like all investments – is not without risks and drawbacks.
While gold performs well sometimes, it's not always clear when to purchase it. Since gold by itself doesn’t produce cash flow, it’s difficult to determine when it’s cheap. That’s not the case with stocks, where there are clearer signals based on the company’s earnings.
Moreover, because gold doesn’t produce cash flow, in order to make a profit on gold, investors must rely on someone else paying more for the metal than they did. In contrast, owners of a business – such as a gold miner – can profit not only from the rising price of gold but also from the business increasing its earnings. So there are multiple ways to invest and win with gold.
If you want to touch and feel your gold or silver then purchasing bullion might be a good way to go. There are many great bullion dealers in Australia. The list below is some of the reputable dealers who can help
ABC Bullion https://www.abcbullion.com.au/
Ainslie Bullion https://www.ainsliebullion.com.au/
As Good As Gold Australia https://www.asgoodasgoldaus.com.au/
Bullion Now https://bullionnow.com.au/
Gold Bullion Australia https://www.goldbullionaustralia.com.au/
Gold Coast Bullion https://goldcoastbullion.com.au/
Gold Stackers https://www.goldstackers.com.au/
KJC Coins Australia Pty Ltd https://www.kjc-gold-silver-bullion.com.au/
Queensland Mint https://queenslandmint.com/
The Perth Mint https://www.perthmint.com/
Exchange Traded Funds that own gold
If you don’t want the hassle of owning physical gold or dealing with the fast pace and margin requirements of the futures market, then a great alternative is to buy an exchange-traded fund (ETF) that tracks the commodity. Three of the largest ETFs include SPDR Gold Shares (GLD), iShares Gold Trust (IAU) and Aberdeen Standard Physical Gold Shares ETF (SGOL). The goal of ETFs such as these is to match the price performance of gold minus the ETF’s annual expense ratio. The expense ratios on the funds above are only 0.4 percent, 0.25 percent and 0.17 percent, respectively, as of October 2022.
The other big benefit to owning an ETF over bullion is that it’s more readily exchangeable for cash at the market price. You can trade the fund on any day the market is open for the prevailing price, just like selling a stock. So gold ETFs are more liquid than physical gold, and you can trade them from the comfort of your home.
Risks: ETFs give you exposure to the price of gold, so if it rises or falls, the fund should perform similarly, again minus the cost of the fund itself. Like stocks, gold can be volatile sometimes. But these ETFs allow you to avoid the biggest risks of owning the physical commodity: protecting your gold and obtaining full value for your holdings.
Buy Gold Online with Rush Gold
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Another way to take advantage of rising gold prices is to own the mining businesses that produce the stuff.
This may be the best alternative for investors, because they can profit in two ways on gold. First, if the price of gold rises, the miner’s profits rise, too. Second, the miner has the ability to raise production over time, giving a double whammy effect.
Risks: Any time you invest in individual stocks, you need to understand the business carefully. There are a number of tremendously risky miners out there, so you’ll want to be careful about selecting a proven player in the industry. It’s probably best to avoid small miners and those that don’t yet have a producing mine. Finally, like all stocks, mining stocks can be volatile.