Gold Investing

Gold is perhaps one of the worlds oldest investment classes. The beauty and relative rarity of gold meant that it was the property of the wealthy. Coins had been stamped in gold and used for civilizations currency throughout the world. The invention of paper money however, offered a more portable means of carrying wealth and participating in mercantile. Paper money and coins stamped in less precious metals marked with a particular denomination made it easy to buy goods with money versus weighing out gold coins, deciphering the purity of the gold, or carrying the very heavy metal.



The money was backed by gold held in a central reserve which imparted its value on the paper or coin currency and offered an insurance on the paper money thus allowing commerce between civilizations. Gold was recognized universally from ancient times.

Investing in gold today offers a hedge against inflation. This means that you can protect earnings in the future by holding a portion of your porfolio in gold. Gold is an asset class that is negatively correlated to the US dollar. As the US dollar decreases with inflation, the value of gold actually rises and visa-versa.

Today's investors have many alternatives for playing the gold market. Options include acquiring, buying, and selling gold bullion coins or gold bars. Alternatives to holding the asset include electronic investing in gold options, or gold futures. Here, investors never actually have to purchase and hold the actual asset but rather purchase a contract for the delivery or sale of gold at some time in the future. When trading options or futures in gold, you are betting that the price of gold will rise going forward. If it does, you can pocket the difference between today's price and the value in the future.

Alternatives plays include buying stock in gold mines or precious metal mining companies. The prices of these stocks should move with the overall gold market, but your investment may be diversified as the mining company may operate copper, platinum, silver, or palladium mines in addition to mining gold.


Still further gold investment options include gold statements. With gold statments, a institution such as a bank will Gold statements are obligations of the issuing institution, usually a commercial bank, to deliver upon demand, a stated quantity and purity of gold. Thus, you do not have to worry about the safe storage of your gold. The holder of the gold will spread its holding cost by pooling with other gold investors.

Gold Accumulation Plans are another gold investment option. Much like gold statements, Plans, you set up an account with a bank of sorts and purchase gold at regular intervals no matter what the price is on the market. This is not unlike the dollar cost average approach to investing in equities. No matter what route you choose for investing in gold, gold investments can be a valuable part of your investment portfolio. Seek an investment professional for investment guidance as investing in gold can still be risky.

Comments from Janet Rose in West Shokan, NY
     Posted on: 02-01-2007
     Rating: Positive

I found a new gold investment adviser who's really interesting. Check out Howard Katz, the one-handed economist at www.thegoldbug.net.

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     Posted on: 11-02-2009
     Rating: Positive

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Comments from goldbullion in india
     Posted on: 11-03-2009
     Rating: Positive

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Comments from goldbullion in india
     Posted on: 11-03-2009
     Rating: Positive

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Comments from JC2811 in USA
     Posted on: 12-19-2009
     Rating: Positive

Analyst Report coming on VHGI Gold (OTCBB VHGI)

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     Posted on: 01-20-2010
     Rating: Positive

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Comments from kevinkoy in Chicago
     Posted on: 04-08-2010
     Rating: Positive

I answer many questions on my blog which you can check out here and ask questions of your own:http://investingoldbullion.com/index.php/component/option,com_idoblog/Itemid,70/view,idoblog/

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Comments from samuel in chicago
     Posted on: 11-12-2010
     Rating: Positive

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